The Bank of Thailand (BoT) Puts the Brakes on Its CBDC

The Bank of Thailand (BoT) has halted its central bank digital currency (CBDC) ambitions due to the availability of existing online payment options.

Mr. Sethaput Suthiwartnarueput, Thai Central Bank Governor, stated in an interview at the 2022 World Economic Forum, that he feels the necessity to roll out CBDC is not that urgent.

Accordingly, the Central bank stated that the Bank of Thailand will continue to execute its retail CBDC public trial in Q4 of 2022. However, this will be done on a small scale, with financial institutions testing deposits, withdrawals, and transfers.

Suthiwartnarueput expressed satisfaction with existing online payment methods like Promptpay and different QR code payments. He also claimed that the use of blockchain technology may result in ‘unintended consequences’ and design concerns due to smart contracts.

Thailand’s military-backed government is aggressively promoting mobile technology in a campaign called “Thailand 4.0”. However, many of the new QR-code-based solutions have proven unsuccessful due to the country’s elderly population not owning smartphones and having limited use.

In other news, there has been some positive news for Thai cryptocurrency traders. According to The Bangkok Post, the government is exempting crypto transactions from 7% VAT until the end of 2023.

All transfers of cryptocurrencies and digital assets on approved digital asset exchanges would be exempt from taxation until December 31, 2023.

Akaradet Diawpanich, CEO of Cryptomind Group Holdings, stated that investors would prefer an exemption from taxes on crypto trading and earnings. He said taxes are the primary reason driving up the cost of investing in digital assets.

The new regulation supplements a prior VAT and capital gains tax exemption on cryptocurrency issued in March. On the other hand, payments with digital assets are now prohibited in the Kingdom.