Regulator granted operating licenses to four digital asset operators

The Bank of Thailand is to start testing its retail Central Bank Digital Currency (CBDC) by the end of 2022.

The retail CBDC will be tested in a limited retail environment with 10,000 participants and three major banks. The Bank of Thailand, the country’s Central Bank and banking regulator made the announcement yesterday on its official webpage.

The post on the webpage read, “the Bank of Thailand will assess the benefits and associated risks from the Pilot to formulate related policies and improve the CBDC design in the future”. The Bank of Thailand will extend the scope of CBDC development aimed at retail to a pilot phase.

A possible real-life application of the “retail CBDC” will be conducted inside the private sector on a limited scale. This will be executed on top of its wholesale CBDC projects and proof-of-concept retail CBDC testing with corporates.

Details of the pilot CBDC project

The pilot is separated into two phases. During the first phase, a ‘Foundation track’ — CBDC will be tested in cash-like activities, i.e., paying for goods and services, within limited areas and a scale of 10,000 retail users. Three companies will participate in the experiment — the Bank of Ayudhya, Siam Commercial Bank and 2C2P.

The testing should start at the end of 2022 and last until mid-2023. A second phase dubbed the “Innovation track” will focus on presenting innovative use cases for CBDC.

The private sector and the public will have a chance to present their use cases for retail CBDC via a “CBDC Hackathon,” which took place on Friday (August 5) and will continue September 12, 2022″.

Selected participants will receive mentorship from experienced financial institutions.

In the meantime, the Bank of Thailand will not issue retail CBDC, “as the issuance requires thorough consideration” of risks and benefits for the financial system in general. On Thursday (August 4), Thailand’s financial regulator, the Securities and Exchange Commission (SEC) granted operating licenses to four digital asset operators.

This, despite the existing turmoil regarding the Singaporean exchange Zipmex, which suspended withdrawals for customers in the country in July. Crypto volumes in Thailand surged almost 600 per cent in early 2021 as the bull market was building momentum.