The Bank of Thailand (BOT) has announced plans to develop a payment system prototype for businesses through the use of Central Bank Digital Currency (CBDC), according to a report published by the bank on Thursday.
The prototype will allow Thailand’s central bank to conduct a feasibility study and also develop ways to integrate the CBDC with the procurement and financial management systems platform developed by Siam Cement.
The CBDC prototype will commence in July 2020 and will run till the end of the year, the BOT said in the report, adding that it is expected to serve as a financial innovation to promote higher payment efficiency for businesses.
Thailand’s central bank further revealed that the pilot program would utilize the knowledge from Project Inthanon. This is a collaborative project between the Bank of Thailand and eight major financial institutions to research and develop systems for domestic transfers using government-backed digital currency.
The central bank is actively exploring the use cases of CBDC. Earlier this year, the BOT, in collaboration with the Hong Kong Monetary Authority (HKMA), successfully completed a cross-border transfer prototype.
CBDC is becoming a norm among central banks across the world. While some are already developing one, others are researching the potential benefits of issuing a national cryptocurrency.
The Bank of Korea (BOK) has already launched a pilot program to test its digital currency. The bank said it would use the project, which will run for 22-months until December 2021, to identify the technical and legal requirements for creating and issuance a CBDC.
Following the launch of the pilot test, the BOK established a six-member advisory group to research and review the legal issues regarding digital currencies launched and governed by the central bank.
China is also closer to issuing its state-backed digital currency. An earlier report revealed that the country could be accelerating the launch of its CBDC to implement massive post-COVID-19 stimulus and to curb the potential consequences of the recent US threats.
Similarly, Sweden’s central bank announced in February that it would set up a test group to examine the potentials of the digital currency if the general public could use it.