The Bank of Thailand (BOT) has revealed that it will delay the testing phase of its central bank digital currency (CBDC) until late 2022.
Thailand Reschedules CBDC Test
Reporting the postponement, Reuters noted that Thailand plans to use the national digital currency as an alternative payment option to cash.
Although the central bank did not state the reason for the delay, it still intends to use the pilot project to evaluate the use of a CDBC to complement cash transactions within a limited skill.
The pilot phase will see some financial institutions and about 10,000 users test the digital currency for online and offline transactions such as deposits, withdrawals, and fund transfers.
Commenting on the development, deputy BOT director Kasidit Tansanguan said that after consultation with relevant partners, it will be working slowly to ensure efficiency.
“Thailand can still take a gradual step in the retail CBDC to ensure efficiency and prudence as it does have a problem with fund transfers or payments as some other countries,” he added.
CBDC to Reduce Cash Reliance
With the world now going digital, especially in the era of COVID, central banks globally are seeking to reduce their over-reliance on cash.
Some countries have already started using CBDC while others are still in the testing phase to see how it works. However, central banks have noted that CBDC will only complement cash and not replace it.
While nations like Nigeria and the Bahamas have started using CBDC, others, including China and Ghana, are already going through a pilot implementation program.
Banks Support CBDC Not Crypto
While central banks are increasingly accepting the idea of launching a national digital currency, they still express their disapproval and distrust for cryptocurrencies.
Tansanguan noted that BOT intends to use its CBDC to reduce financial costs and not compete with crypto assets or stablecoins.
Earlier this month, the Bank of Thailand warned local banks and financial institutions to refrain from trading digital assets, adding that it does not support the use of cryptocurrencies as a medium of exchange for goods and services.
In another report, Indonesia’s central bank announced plans to launch a CBDC to combat cryptocurrencies like Bitcoin and Ethereum.