The Pheu Thai Party, the leader of Thailand’s new coalition party, plans to follow through on its policy for a 10,000 baht ($285) giveaway to every person aged 16 or older in early 2024. The economic stimulus will be in the form of a digital “utility token” based on blockchain and using a digital wallet.
Previously, Pheu Thai deputy secretary-general Paopoom Rojanasakul said that in addition to the stimulus, one of the objectives is to roll out a nationwide blockchain-based financial payment system. The party’s website also states it is supportive of a central bank digital currency (CBDC).
Rather than giving away cash, the purpose of the Thai blockchain giveaway is to encourage local businesses by restricting its usage to within 4 kilometers of home. And citizens can spend the token on certain things such as food, water and medicine. They cannot use it online, nor can it be exchanged for cash, and will expire after six months. Given the payment will be based on national identities, those without a mobile phone can use their ID to receive a code.
Develop a blockchain giveaway system in 6 months?
The Bank of Thailand is already quite advanced in its work on a retail CBDC which may or may not use blockchain. At the moment it is running a limited 10,000-person digital baht pilot in conjunction with Krungsri Bank, Siam Commercial Bank and 2C2P Thailand. Given the government’s short timeframe for the giveaway, one might expect it to attempt to add the utility token to the CBDC solution. But there has been no mention of that.
Another alternative would be to use an existing digital wallet solution already used for government stimulus – the Pao Tang app developed by state-controlled Krung Thai Bank (KTB). However, the government may prefer to use something less associated with a single bank.
Krung Thai Bank was also one of the partners for the blockchain digital bonds that the government issued three years ago.
A blockchain giveaway such as this has a major economic impact. With 56 million people aged 16 or over, the program’s cost will be Baht 560 billion ($16 billion), although the central bank has given a preliminary estimate of a 3% boost to GDP, according to the Bangkok Post. One of the concerns could be the impact on inflation. Like many other countries, Thailand’s inflation spiked post-COVID but has dropped substantially and is now expected to be in the 1%-2% range this year.
Thailand’s strong digital currency track record
The Bank of Thailand has been at the forefront of CBDC research and development for years. Its wholesale CBDC work, Project Inthanon eventually led to a joint initiative with the Hong Kong Monetary Authority (HKMA), Inthanon LionRock. And that evolved into mBridge, the cross border CBDC solution that also includes China and the UAE with several other central banks expected to join.
