During a press conference yesterday Thailand’s Minister of Finance, Pichai Chunhavajira, discussed plans to issue a Thai Baht stablecoin backed by government bonds. The launch target is October. It follows previous reports of plans to use Bitcoin and cryptocurrencies as payments on the holiday island of Phuket.
However, former prime minister Thaksin Shinawatra recently told the Bangkok Post that the planned crypto sandbox is for asset backed tokens, where the underpinning might include government bonds and gold. So for payments, the plan is a Thai Baht ฿ stablecoin rather than Bitcoin ₿.
Minister Chunhavajira said new government bonds currently “end up in the hands of financial institutions. We want to make these bonds more accessible to individual investors.” Hence, initially newly issued bonds will be used to back the stablecoin. Five years ago the country used blockchain to issue smaller denominated bonds to the public.
According to The Nation, the government is developing a centralized platform for the secondary market trading of the stablecoins. The ultimate plan is to enable the stablecoin to be used for everyday payments.
Central bank views on stablecoins, crypto
While the Minister said it plans to consult the Bank of Thailand (BOT), the central bank’s Sethaput Suthiwartnarueput seemed less than enthusiastic, according to Reuters. While he understands where the impetus is coming from, he has concerns about fragmenting payments.
“The benefits of the use case have to be very, very clear because there are downside risks to moving to that,” he said.
Meanwhile, Thailand famously launched a significant digital wallet money giveaway, where the cash could only be used for certain purposes. The Governor noted it had not had the desired impact on consumption, as many had used it to pay off debt.
Apart from the planned stablecoin sandbox, the local Securities and Exchange Commission (SEC) launched a digital asset sandbox last year. Plus, the Bank of Thailand launched a programmable payment sandbox.
