“In addition to previous Wholesale CBDC projects and Proof-of-Concept Retail CBDC testing with corporates, the BOT deems it necessary to extend the scope of Retail CBDC development to a Pilot phase in which real-life application of Retail CBDC will be conducted in cooperation with the private sector within a limited scale,” the BOT said in a press release on Friday (Aug. 5).
BOT Deputy Governor Vachira Arromdee said that central banks worldwide are looking into the potential of a retail CBDC as the “foundation of the future financial system.”
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The pilot phase is testing real-life applications of a retail CBDC with the private sector in order to help the BOK develop policies surrounding the risks and benefits and establish a plan for the future.
It will be separated into a Foundation track to assess the system’s efficiency and safety including the technological design, and an Innovation track to focus on programmability to facilitate the development of innovative use cases, according to the release.
The Foundation track is expected to begin at the end of 2022 and last until mid-2023 and will test the use of payment for goods and services in a specific area. Approximately 10,000 users determined by the Bank of Thailand will be included in the pilot, including the Bank of Ayudhya Public Company Limited, Siam Commercial Bank Public Company Limited and 2C2P (Thailand) Company Limited.
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The Innovation track will develop new financial services that meet the needs of a variety of users and will assist the BOT in improving the CBDC’s blueprint to ensure suitability in the Thai context.
In the future, the BOT is planning to invite the private sector and general public to present use cases in the development of retail CBDCs through the CBDC Hackathon program. Applications for the program are being accepted through Sept. 12.
