Thailand CBDC Tracker

Thailand is in the launched phase. The Thai government launched a digital wallet program to give out 10,000 baht to 50 million people on August 1, 2024. Due to the lack of information provided by the Thai government, there could be a reasonable debate over whether the digital wallet is truly a CBDC. However, given the nature of the programmable restrictions on how the money is used and that the money must be spent through the app, it appears to be a CBDC for all intents and purposes.

CBDC History and Development

The Bank of Thailand began its CBDC development in 2018 with Project Inthanon Phase 1. This project mostly focused on using a wholesale CBDC to settle payments with R3, Bangkok Bank Public Company Limited, Krung Thai Bank Public Company Limited, Bank of Ayudhya Public Company Limited, Kasikornbank Public Company Limited, Siam Commercial Bank Public Company Limited, Thanachart Bank Public Company Limited, Standard Chartered Bank (Thai) Public Company Limited, and The Hongkong and Shanghai Banking Corporation Limited.

In 2019, phase 2 of Project Inthanon focused on interbank trading and regulatory compliance. Separately, the Bank of Thailand also worked with the Hong Kong Monetary Authority to investigate using a CBDC for cross-border transfers and foreign exchange settlements in a project referred to as Project Inthanon-Lionrock.

The Bank of Thailand announced in 2020 that it would launch a project to build a CBDC prototype. The press release stated that “the CBDC prototype will be integrated with the procurement and financial management systems of the Siam Cement Public Company Limited and its suppliers developed by Digital Ventures Company Limited.”

In 2021, the Bank of Thailand published a report on the implications of issuing a retail CBDC. The report identified four key characteristics for a CBDC. It must be cash-like, non-interest bearing, distributed by financial institutions, and convertible. The report also noted that the Bank of Thailand “predicts that the public’s demand for Retail CBDC will gradually increase over time and that CBDC could become an alternative payment option in the future, partially substituting cash and e-money.”

Also in 2021, Project mBridge was launched to expand cross-border settlement experiments. In this project, the Bank of Thailand has been working with the Bank for International Settlements. As the Bank for International Settlements describes it, Project mBridge “seeks to solve some of the key inefficiencies of cross-border payments, such as high costs, low speed and transparency, and operational complexities. At the same time, the project aims to safeguard currency sovereignty and monetary and financial stability for each participating jurisdiction, guided by the principles of ‘do no harm,’ compliance, and interoperability.”

Then in 2022, the public was invited to join the Bank of Thailand in a “CBDC Hackathon” where people could submit designs for a CBDC and compete for consideration. Among the ten finalists were a way to track carbon emissions, a payday loan service, a financial literacy program, a wage management program, a crowd-funding program, an insurance program, and more.

Project Bang Khun Phrom—the Bank of Thailand’s CBDC pilot—ran from the end of 2022 to the third quarter of 2023. To participate in the pilot, those invited need to install a mobile app that will verify user’s identities, add money to a digital wallet, and then transfer that money into the CBDC where one digital baht is equal to one baht. Overall, the pilot was limited to 10,000 participants and select merchants.

In 2023, the Thai government was going to distribute 10,000 baht ($276) payments in CBDC to the public, but those plans were delayed. Deputy finance minister Julapun Amornvivat said that the distribution would instead take place in 2024 to give the government time to allocate the money and further develop the system. In total, it’s estimated that 549 billion baht ($15.45 billion) will be given out. Critics within the Thai government have warned that there are multiple problems with the plan that go beyond just questions of funding. Former senator Rosana Rositrakul said, “The 10,000-baht digital wallet scheme can be compared to the rice-pledging scheme of the Yingluck Shinawatra government which resulted in several cabinet ministers being jailed.”

The Bank of Thailand claims a CBDC would help make payments “efficient, fast, and accessible” and that “programmability on the CBDC… will help financial service providers... develop innovations.” However, central bank governor Sethaput Suthiwartnarueput has expressed concerns that a CBDC does not offer unique benefits relative to systems like PromptPay (Thailand’s existing digital payment infrastructure).

In 2024, the Bank of Thailand published a report on its retail CBDC. The report claims that a CBDC could “foster competition among [financial institutions], enable new financial innovations, and make more capable and cost-efficient services available to the public in the future.” However, it also notes that there are challenges with respect to user adoption and extended consequences. The Bank of Thailand then issued an update in June 2024 where it said it had started testing programmable payments in a regulatory sandbox.

In July 2024, Thailand Prime Minister Srettha Thavisin announced that the government would soon use digital wallets to distribute 10,000 baht ($281) to Thai citizens over the age of 16 with incomes under 840,000 baht ($23,710) and savings under 500,000 baht ($14,072). For context, the average income in Bangkok was 468,600 baht ($13,222) in 2021. Applicants must verify their identity using both their national identification card and facial recognition. Once approved, recipients are only allowed to spend the money within the districts listed on their identification cards, and they must do so within six months of receiving the money. Furthermore, recipients are not allowed to spend the money on lottery tickets, alcoholic beverages, tobacco products, cannabis, kratom, gift cards, cash cards, gold, diamonds, gems, oil, fuel, natural gas, electrical appliances, electronic devices, or communication devices. In fact, recipients are not even allowed to spend the money online, at department stores, or at large chain stores.

Registration for the digital wallet opened on August 1, 2024. Various outlets reported that the system crashed on August 1 due to the weight of the 14.5 million applications that came in. By August 2, the Ministry of Digital Economy and Society reported that several fake application sites had come to light. By August 4, another 10 million people had applied.

Due to the lack of information provided by the Thai government, there could be a reasonable debate over whether the digital wallet is truly a CBDC. Technically speaking, the digital wallet handout does not appear to be run by the central bank. Rather, the app that hosts the digital wallet was developed by the Ministry of Digital Economy and Society in collaboration with the Digital Government Development Agency to be a “government super app.” So, it does not appear to be a “pure CBDC.” However, given the nature of the programmable restrictions on how the money is used and that the money must be spent through the official government mobile the app (available in both Apple and Google stores), it appears to be a CBDC for all intents and purposes. Fundamentally, it represents a government taking over greater control of both the financial system and each individual’s finances.

Human Rights and Civil Liberties Concerns

Thailand earned a 30 out of 100 in Freedom House’s 2023 Freedom in the World report. Key concerns related to the use of a CBDC include efforts to oppress dissenting voices and government corruption.

The government in Thailand does not take criticism well. According to Amnesty International, “The authorities continued to bring criminal charges against [activists, journalists, political opponents, and other individuals] who expressed opinions critical of the government.” Amnesty International further reported that “from mid-2020 to September 2022, at least 1,860 individuals, including 283 children, faced criminal proceedings for expressing views critical of the government.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances. Given that it was reported that “the Minister of Digital Economy and Society revealed that the government was considering creating a single internet gateway to tighten official control over internet usage,” it’s possible a CBDC is being looked at to tighten control of finance.

Government corruption is also a problem. According to Freedom House, “Thailand’s anticorruption legislation is inadequately enforced, and bribes and gifts are common practice in business, law enforcement, and the legal system.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.