The Bank of Thailand has announced it is working on a central bank digital currency (CBDC), becoming the latest global central bank to back CBDCs.
The central bank, which also regulates financial markets in Thailand, is reported to be working with commercial banks in developing a distributed ledger system, which would eventually support transactions in the new central bank-backed digital currency.
A prototype digital currency is already under development at the bank, as part of a project aimed at creating new payment systems for businesses.
The model builds on the bank’s previous work with Project Inthanon, a DLT platform developed by the Bank of Thailand in conjunction with leading commercial bank partners.
As part of the project, the bank will conduct a study into the feasibility of integrating a digital currency within the payment system, which could pave the way for commercial transactions on the blockchain.
The prototype CBDC will be trialed by Siam Cement Public Company and its suppliers, within their procurement and payments systems. The central bank said the project could serve as a first step for other businesses in adopting a CBDC.
The Bank of Thailand said it hopes the prototype will reduce costs for payments, as well as allowing for more agile payments.
The pilot is slated to begin in July, and scheduled to run throughout the rest of the year. At the end of the year, the central bank is expected to publish its outcomes from the exercise.
The move represents the latest venture by a central bank towards the adoption and use of central bank digital currencies.
Reserve banks across the world are already actively engaged in developing their own CBDCs, including China, which is reported to be close to launching its digital yuan. Others are at an enhanced stage of research and development, including the central banks of France and South Korea.