Thailand’s central bank considers developing its own digital currency, claiming that it would reduce transaction and validation time and costs.
In his keynote on Thai economic development at Nomura Investment Forum Asia (NIFA) in Singapore, BoT governor Veerathai Santiprabhob spoke of a new project in which the central bank and other Thai banks join forces to develop a “new way of conducting interbank settlement” using a central bank-issued digital currency (CBDC).
According the bank, the adoption of its own cryptocurrency by the banking system would reduce the transaction and validation time as well as its costs “due to less intermediation process needed compared to the current systems.”
Santiprabhob noted that the bank is not prioritizing the adoption of CBDCs, but is focused on exploring the potential of the technology. The bank governor stressed that the financial institution is a “facilitator of innovation,” but is also a “regulator to safeguard financial stability”:
“Like other central banks, our goal is not to immediately bring CBDC into use, but rather to explore its potential and implications for back office operations.”
In addition to considering the issuance of CBDCs, Santiprabhob also talked about the benefits of the financial system adopting blockchain technology, claiming that banks are “working closely with the financial industry” to bring the technology to “various banking applications.”
Thailand’s central bank is the latest to consider the adoption of a CDBC. Last month, Norway’s Norges Bank issued a working paper in which it considered developing its own digital currency as a means to supplement cash and to “ensure confidence in money and the monetary system.” Riksbank of neighboring Sweden is also investigating the potential of an e-krona as a result of declining cash circulation.
Earlier today at his annual live Q&A session, Russia’s President Vladimir Putin claimed that neither Russia nor “any other country” can have its own cryptocurrency “by definition”, given crypto’s borderless nature.