BANK OF THAILAND LAUNCHES DIGITAL CURRENCY PILOT PROJECT

Last updated: June 19, 2025, 18:45 | Written by: Cathie Wood

The digital future is rapidly unfolding, and the Bank of Thailand (BOT) is at the forefront of this evolution.Taking a significant step towards modernizing its financial infrastructure, the Bank of Thailand has officially launched its retail central bank digital currency (CBDC) pilot project.This initiative, taking place within a carefully controlled regulatory sandbox, marks a pivotal moment in Thailand’s exploration of digital currencies and their potential to reshape the country's financial landscape. Within the central banking community, the Bank of Thailand is an acknowledged leader in the central bank digital currency (CBDC) space. Starting in 2025 with the launch of Project Inthanon and continuing to the present day with the multi-jurisdiction Project mBridge, the Bank has long been at the forefront of wholesale CBDC activity.This pilot project, which has been eagerly anticipated, involves collaboration with three payment providers and aims to explore the practical applications and benefits of a digital baht.The project, originally slated to launch in 2025 but delayed, will run for several months, engaging up to 10,000 users and focusing on real-world use cases. Bank Of Thailand Launches Its Digital Currency Pilot Project advertisementBut what does this mean for the average Thai citizen, the financial sector, and the future of money in Thailand?This initiative is more than just a technological experiment; it's a strategic move to enhance financial innovation, promote competition, and potentially boost the nation’s GDP.

Understanding the Retail CBDC Pilot Program

The Bank of Thailand’s CBDC pilot project is structured around two primary tracks: the Foundation Track and the Innovation Track. The Bank of Thailand has revealed its plans to launch a retail CBDC pilot in a regulatory sandbox in collaboration with three payment providers.The Foundation Track focuses on testing the core functionality of the retail CBDC, ensuring that it can perform essential functions such as payments, transfers, and basic security measures.This track is crucial for establishing a reliable and robust digital currency infrastructure.

The Innovation Track, on the other hand, delves into the more exploratory aspects of CBDC. In this report, we summarize the findings of Retail CBDC Pilot Program covering the testing of core functionality (Foundation Track) and the exploration of CBDC for financial innovation (Innovation Track).It aims to leverage the digital currency to drive financial innovation, explore new use cases, and foster competition among financial service providers. The central bank of Thailand shall launch a retail central bank digital currency (CBDC) pilot project during the current month of June, which willThis track is where the potential of the digital baht to revolutionize financial services will be rigorously tested.

Key Objectives of the Pilot Project

The Bank of Thailand has outlined several key objectives for this pilot project:

Evaluating Core Functionality: The primary goal is to assess the CBDC's ability to perform fundamental functions effectively and securely.
Driving Financial Innovation: Exploring how the digital baht can stimulate new financial products and services.
Enhancing Competition: Fostering a more competitive landscape among financial service providers.
Promoting Financial Inclusion: Potentially expanding access to financial services for underserved populations.
Improving Payment Efficiency: Streamlining payment processes and reducing transaction costs.

The Regulatory Sandbox: A Controlled Environment

The pilot project is being conducted within a regulatory sandbox, a controlled environment that allows the Bank of Thailand to test the CBDC in a real-world setting without exposing the broader financial system to undue risk. Notably, the BOT maintains that the digital baht remains a project under study a Pilot to Learn, Not Pilot to Launch. Thailand s past CBDC experience. The ongoing retail pilot complements the BOT s past work on wholesale CBDC and cross-border applications.This approach enables the BOT to closely monitor the project, gather valuable data, and make necessary adjustments along the way.

The sandbox provides a safe space for innovation, allowing the participating payment providers and users to experiment with the digital baht and provide feedback to the BOT.This iterative process is essential for refining the CBDC and ensuring that it meets the needs of the Thai people and the financial sector.

Who is Participating in the Pilot?

The Bank of Thailand is collaborating with several key players in the financial sector for this pilot project:

Three Payment Providers: These providers are responsible for developing and operating the applications that users will use to interact with the digital baht. (The specific names are less important than the concept.)
Bank Employees and Nearby Businesses: Enlisted for the pilot, these participants provide real-world testing and feedback on the CBDC’s usability.
Up to 10,000 Users: These users will participate in the pilot program and provide feedback on their experience with the digital baht.

The involvement of these diverse participants is crucial for ensuring that the CBDC is user-friendly, accessible, and meets the needs of a wide range of users.

The Digital Baht: What We Know So Far

The digital baht, or retail CBDC, is envisioned as a digital form of the Thai baht issued and backed by the Bank of Thailand. Bank of Thailand Launches Digital Currency Pilot ProjectIt is designed to complement, not replace, existing forms of money, such as cash and commercial bank deposits.The digital baht aims to offer several advantages over traditional payment methods, including faster transaction times, lower costs, and increased security.

The specific features and functionality of the digital baht are still being developed and refined as part of the pilot project.However, some key characteristics are expected to include:

Central Bank Backing: The digital baht is backed by the Bank of Thailand, making it a safe and reliable form of money.
Digital Form: The digital baht exists only in digital form, allowing for seamless electronic transactions.
Complementary to Existing Money: The digital baht is intended to work alongside cash and bank deposits, providing users with more payment options.
Potential for Programmability: The digital baht could potentially be programmed with specific rules and conditions, enabling new and innovative use cases.

How Will the Digital Baht Work?

While the details of how the digital baht will work are still being finalized, the general concept involves users holding the digital currency in digital wallets on their smartphones or other devices. The Bank of Thailand announced the pilot in August and was initially scheduled to launch in 2025. It referred to the project as a pilot to learn rather than a pilot launch. Siam Commercial Bank s CBDC SCB Wallet pilot is also operating similarly to Krungsri with participation from its staff and neighbouring merchants.They can then use these wallets to make payments to merchants, transfer funds to other users, and perform other financial transactions.

Each payment provider involved in the pilot project has developed its own app, which users can download and use to access and manage their digital baht holdings. The Bank of Thailand will launch a retail central bank digital currency (CBDC) pilot project in a regulatory sandbox this month. Three payment providers will take part, according to local media.These apps are designed to be user-friendly and intuitive, making it easy for users to adopt the digital currency.

Potential Benefits of a Retail CBDC for Thailand

The Bank of Thailand believes that a retail CBDC has the potential to bring significant benefits to Thailand:

Enhanced Financial Inclusion: A CBDC could provide access to financial services for the unbanked and underbanked populations, particularly in rural areas.
Increased Payment Efficiency: Digital payments are typically faster and cheaper than traditional payment methods, reducing transaction costs for businesses and consumers.
Reduced Reliance on Cash: A CBDC could reduce the country's reliance on cash, which is costly to manage and can facilitate illicit activities.
Improved Monetary Policy Transmission: A CBDC could give the central bank more direct control over the money supply, improving the effectiveness of monetary policy.
Stimulated Innovation: A CBDC could encourage the development of new financial products and services, fostering innovation in the financial sector.
Economic Growth: Some projections suggest that the program could boost Thailand's GDP by up to 1.6%.

Last year's pilot retail CBDC launch saw significant adoption, with 140 merchants and 4,000 consumers participating, along with two of the country’s largest banks. The Bank of Thailand has revealed its plans to launch a pilot project for a retail central bank digital currency (CBDC) within a regulatory sandbox, commencing this month. The project aims toThis pilot was hailed as an effective tool to promote innovation and foster competition among financial service providers.

Addressing Concerns and Challenges

While the potential benefits of a retail CBDC are significant, there are also concerns and challenges that need to be addressed:

Cybersecurity Risks: A digital currency is vulnerable to cyberattacks, which could compromise the security of user funds and the stability of the financial system.
Privacy Concerns: The use of a digital currency raises concerns about the privacy of financial transactions.
Financial Stability Risks: A CBDC could potentially disrupt the banking system by reducing the amount of deposits held by commercial banks.
Regulatory Challenges: The introduction of a CBDC requires a comprehensive regulatory framework to address issues such as anti-money laundering, consumer protection, and data privacy.

The Bank of Thailand is aware of these challenges and is taking steps to mitigate them.The regulatory sandbox provides a safe environment to test and refine the CBDC, and the BOT is working closely with other government agencies and stakeholders to develop a comprehensive regulatory framework.

Bank of Thailand's History with CBDCs

The Bank of Thailand is not new to the world of digital currencies. The Bank of Thailand (BOT) is launching a central bank digital currency (CBDC) pilot project for retail transactions in a regulatory sandbox with the participation of two commercial banks and a payment service from Singapore. The test run will last two months.It is an acknowledged leader in the central banking community regarding CBDCs.Since 2025, with the launch of Project Inthanon, and continuing with the multi-jurisdiction Project mBridge, the Bank has been at the forefront of wholesale CBDC activity.

The ongoing retail pilot complements the BOT’s past work on wholesale CBDCs and cross-border applications.The Bank of Thailand has actively participated in significant ventures, including the Bank for International Settlements mBridge cross-border payment project and the Project Inthanon-Lion Rock project in collaboration with the Hong Kong Monetary Authority.

mBridge: A Minimum Viable Product

The mBridge cross-border CBDC project, an initiative between the Bank for International Settlements Innovation Hub and the central banks of China, Hong Kong, Thailand, and the UAE, has entered the minimum viable product (MVP) stage, the earliest production phase.

This demonstrates Thailand's commitment to exploring the potential of digital currencies beyond its borders, fostering collaboration with other countries to create a more efficient and interconnected global financial system.

The Future of the Digital Baht

The launch of the retail Bank of Thailand Launches Digital Currency Pilot Project is a significant milestone in Thailand's journey towards a digital future.While the project is still in its early stages, it has the potential to transform the country's financial landscape and bring significant benefits to its citizens and businesses.

The Bank of Thailand is taking a cautious and measured approach, emphasizing that this is a ""Pilot to Learn, Not Pilot to Launch."" The BOT is committed to carefully evaluating the results of the pilot project and addressing any challenges before making a decision about whether to launch a full-scale retail CBDC.

What’s Next?

After the completion of the pilot program, the Bank of Thailand will analyze the data and feedback collected to determine the next steps. Today, local sources reported that the Bank of Thailand has started working with three domestic payment service providers to launch the country s retail central bank digital currency (CBDC), the digital baht.This may involve further testing, modifications to the CBDC design, or the development of new regulations.

The Bank of Thailand is also likely to continue collaborating with other central banks and international organizations to share knowledge and best practices on CBDCs.This collaboration is essential for ensuring that Thailand’s digital currency is compatible with the global financial system and can facilitate cross-border payments.

Conclusion

The launch of the retail CBDC pilot project represents a pivotal moment for Thailand. The Bank of Thailand has unveiled a plan to launch a retail central bank digital currency (CBDC) pilot project within a regulatory sandbox, commencing this month according to a report by Bangkok Post.This initiative, spearheaded by the Bank of Thailand, showcases the nation's commitment to embracing digital innovation and modernizing its financial infrastructure. The Central Bank of Thailand has launched a retail digital currency experiment with Bank of Ayudhya, Siam Commercial Bank and 2C2P. What can be expected from the project and how will it affect financiWhile challenges remain, the potential benefits of a digital baht are significant, ranging from enhanced financial inclusion and increased payment efficiency to stimulated innovation and economic growth. Bank of Thailand Launches Digital Currency Pilot Project Cointelegraph Thailand CBDC payment regulation digitalcurrencyThe Bank of Thailand's cautious and methodical approach, coupled with its collaborative spirit, positions the country as a leader in the global CBDC landscape.By carefully evaluating the pilot's outcomes and addressing potential risks, Thailand can pave the way for a future where digital currency plays a vital role in its economy and society.

Key Takeaways:

The Bank of Thailand has launched a retail CBDC pilot project in a regulatory sandbox.
The pilot project involves three payment providers and up to 10,000 users.
The digital baht aims to complement existing forms of money and offer faster, cheaper, and more secure transactions.
The potential benefits of a retail CBDC include enhanced financial inclusion, increased payment efficiency, and stimulated innovation.
The Bank of Thailand is taking a cautious and measured approach, emphasizing that this is a ""Pilot to Learn, Not Pilot to Launch.""

Call to Action: Stay informed about the progress of the CBDC pilot project by following the Bank of Thailand's official announcements and news releases.Your participation in surveys or feedback initiatives can contribute to shaping the future of digital currency in Thailand.