Vachira Arromdee, deputy governor of the central bank, stated that the study will match the interest of other central banks, focusing on the development of retail CBDC and its possible impacts across the banking sector.

The Bank of Thailand is one of the first central banks to explore the potential of retail CBDC for the future of their financial ecosystem. The move presents an opportunity for diversification of the Thai economy and increased opportunities of businesses for access to more user-friendly and cost-effective financial services.

The pilot will be separated into two phases: Foundation and Innovation. The Foundation phase will test the technology of the CBDC in payment activities through 10,000 retail consumers chosen by the Bank of Thailand along with the Bank of Ayudhya Public Company Limited, Siam Commercial Bank Public Company Limited. The technology will be developed by Giesecke+Devrient.

The Innovation stage will assess the programmability and development of CBDC for a range of consumers, aiming to observe real-world applications of CBDC and adapt its design to suit Thai retail consumers.

The central bank also announced a CBDC Hackathon to open up public discussion on the topic and encourage industry participation.

The Bank of Thailand emphasised that the pilot will determine the suitability of CBDC technology in Thai contexts, and does not guarantee and issuance of retail CBDC.

Earlier this year, Thailand’s regulatory Securities and Exchange Commission banned cryptocurrency as a means of payment. In a statement, the Bank of Thailand cautioned against using crypto as means of payment.