The Bank of Thailand has a harsh stance against the use of stablecoins in the country, and in March, the monetary authority issued a stern warning that it will begin penalizing the usage of any Thai Baht-backed stablecoins.
Thailand’s apex monetary institution, the Bank of Thailand (BoT) is seeking a public opinion with respect to the development of its Central Bank Digital Currency (CBDC) and the subsequent tests ahead scheduled for 2022. The BoT revealed this in a Press Release published on Friday noting it requires public feedback on the approach to the development of a Retail Central Bank Digital Currency (Retail CBDC) for the general use of the public as revealed by Ms.Vachira Arromdee, Assistant Governor of the Financial Markets Operations Group, Bank of Thailand (BOT).
The revelations made by Arromdee were published in a separate report in which the BoT reiterated that the persistence and success of stablecoins for use in transactions in the country poses risks to “monetary sovereignty and financial stability.”
The apex bank said its proposed retail CBDC is a “digital form of money” that will be issued by the bank for use as legal tender both in online and offline transactions. The Bank of Thailand noted that the “Retail CBDC is easily portable and has the potential to be used in various innovative financial services.” As such, the need to consult important stakeholders across both the public and the private sector is necessary.
Per the proposed Retail CBDC, the BoT noted that its “main objective in exploring Retail CBDC is aimed at providing citizens with access to more convenient and secure financial services. In addition, the development of a Retail CBDC will support a technology-led future that is efficient and cost-effective, and contribute to the development of more diverse and innovative financial services.”
Interested public commenters can do so through 15 June 2021, and the BoT said the inputs received will form part of its “consideration for the development of Retail CBDC.”
Bank of Thailand Aims to Suppress Stablecoin Usage Ahead of CBDC Rollout
The Bank of Thailand has a harsh stance against the use of stablecoins in the country, and in March, the monetary authority issued a stern warning that it will begin penalizing the usage of any Thai Baht-backed stablecoins including the Thai Baht Digital (TBT) created by Terra. The BoT claimed at the time that such usage can disrupt the stability of the national currency system.
“Although THT is not used as a medium of exchange, it could cause fragmentation of the Thai currency system should THT or other stablecoins come to replace, substitute, or compete with baht issued by the central bank. Such usage would ultimately affect the general public’s confidence in the stability of the national currency system, which is the cornerstone of all economic activities,” the BoT said as reported earlier by Coinspeaker.
Beyond Thailand, the use of stablecoins is becoming commonplace with several crypto firms creating unique fiat pegged digital currencies in various countries without much restriction. Differing laws however are stirring a softer embrace of the technology by the European Central Bank (ECB) who also has the grand plan of debuting its own stablecoin.