Thailand’s Central Bank is about to deploy its digital currency CBDC) with local businesses. This will be the project’s third phase before conducting a mainstream launch.
The Nation Thailand quoted the Bank of Thailand (BOT) Assistant Governor Vachira Arromdee, who gave a progress report on its third phase. Arromdee said the bank had begun using the digital currency for financial transactions with several large corporations. She added that later in the year, BOT would rope in the Hong Kong Monetary Authority (HKMA), noting that there were companies offering influencer marketing services. Vachira added:
“The central bank is also thinking about expanding use of the cryptocurrency to the general public, but a comprehensive study must be completed before taking such action.”
According to the assistant governor, the digital currency might negatively influence commercial banks by hurting demand for intermediaries in financial transactions. However, the CBDC would eventually cut the costs of transactions. She mentioned China saying the public use of digital currencies hadn’t impacted negatively on the financial system. CBDCs were initially called central bank-issued cryptocurrencies by they differ from bitcoin and work like fiat currencies. However, they’re still driven by a permissioned version of blockchain.
Several Central Banks the world over are researching and experimenting with national digital currencies. China may well become the first big economy to have a central bank-backed digital currency. With Thailand and China taking giant steps in this direction, it may simply be a matter of time before Asian countries lead the adoption of CBDCs.
Bitcoin Has Remained the King
The Bank of International Settlements had earlier this year reported that the ongoing coronavirus pandemic had stimulated central banks to accelerate research on CBDCs to help people avoid physical money. China is already testing its national digital currency’s capacity, named the Digital Currency Electronic Payment (DCEP).
Central banks have been cagey about cryptocurrencies as long as they have existed. Bitcoin is opening a new frontier in money matters with a currency out of government and financial regulators’ reach. The creation of bitcoin is revolutionary, and the use of an open-sourced, peer-to-peer digital currency is disrupting global financial markets. Bitcoin has remained the king in the cryptocurrency market, something that China is trying to change via its digital Yuan. The CEO and co-founder of the Bitfury Group Valery Vavilov said:
“Bitcoin catalyzed the creation of an entire cryptocurrency ecosystem […] it has grown in both market capitalization and popularity. At the same time, digital commerce expanded. These forces brought cryptocurrencies and blockchain to the forefront.”