Pre-empting positive interpretation of the move, the Bank Of Thailand reiterated “it does not have plans to issue Retail CBDC.”

The Bank of Thailand, the nation’s central bank, said on Friday that it is extending the scope of retail central bank digital currency (CBDC) development by starting a pilot study.

The central bank said in an announcement that it “deems it necessary to extend the scope of retail CBDC development to a pilot phase.” However, it also reiterated its stance and said that it does not have plans to issue a retail digital currency.

Deputy Governor of the Bank of Thailand, Vachira Arromdee, noted in the release that central banks around the world were seeing “the potential of retail CBDC as being the foundation of the future financial system.”

The latest pilot would be in addition to previous wholesale CBDC projects and the proof of concept study for retail CBDC being conducted with the help of the corporate sector.

The pilot phase will be aimed at testing real-life application of a retail CBDC and will be conducted with the support of the private sector. This will help the Bank of Thailand formulate related policies and improve the CBDC design, the announcement said.

The first of two tracks of the pilot will focus on assessing “the system’s efficiency and safety” by “conducting cash-like activities, such as paying for goods and services, within limited areas and scale of approximately 10,000 retail users selected by the Bank.”

This first track is expected to begin at the end of 2022 and last until mid-2023.

The Bank of Thailand has earlier said “don’t use crypto for payments” and Thailand’s SEC has banned the use of crypto as a means of payment from April 1, 2022.

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Design principles are due out later this week, though no final decision has been taken on the digital peso.

Chile’s central bank digital currency (CBDC) would need to accept offline payments, the central bank governor said at an event on Tuesday. Governor Rosanna Costa promised a policy paper on the topic later this week, but added that no final decision had been taken on whether to issue a digital form of the Chilean peso.

A recent BIS survey suggests that 9 out of 10 central banks are considering issuing their own virtual assets, in part due to competition from the likes of bitcoin, but they are grappling with design issues to ensure access and privacy.

The CBDC should “should operate both online and offline,” Costa said at an event hosted by the Swiss national bank, adding that the technology to do so was “not necessarily efficient today.”

The system should “allow the authorities to trace the transaction afterwards,” while safeguarding personal data, Costa said.

The CBDC would have to coexist with and be convertible with cash and commercial banks, and be secure, she added, saying that pilot projects could be implemented after further discussions with public and private sectors due later this year.

In jurisdictions such as the European Union (EU), officials are considering how to balance ability to make discreet cash-like transactions with the need to track illicit finance – and are considering offering more private means of payment for small purchases. Ghana has also considered making its CBDC available offline.

Others think the issue is a waste of time, and that central banks should be focusing on areas where payments are now difficult.

“We are barking up the wrong tree with retail CBDCs,” Ravi Menon of the Monetary Authority of Singapore told the event, arguing that existing payment networks were enough to deal with the needs of ordinary citizens.

“The tree we should be barking up is wholesale CBDCs for cross border payments,” Menon added, implying that banks could make big international transactions without to traditional tools like correspondent banking system and SWIFT messaging service, which he called “laborious” and “archaic.”

International standard setters have been broadly supportive of moves to issue CBDCs, but worried they might mean central banks lose their power to tell citizens what to do with their money.

“In many countries with weak institutions, citizens might have incentives to move money out of the country,” said Tobias Adrian, director of the IMF’s Monetary and Capital Markets department. “The vast majority of countries have some forms of capital controls and there’s both direct and anecdotal evidence that crypto assets are used for that.”

The IMF recently said countries should extend their laws to ensure measures such as restrictions on overseas payments include crypto assets.

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The Ministry of Finance is pushing forward with cryptocurrency regulation in Russia. Crypto payments will still be prohibited.

Russia’s Ministry of Finance is pushing forward with its plan to regulate cryptocurrencies in the country, and has introduced a bill to parliament. According to a press release published on Monday, the bill was presented Feb. 18. and is based on the previously approved roadmap drafted by several government bodies, including key law-enforcement agencies.

The announcement highlights the policy split with the Bank of Russia, which opposes regulation and would rather see cryptocurrency trading and mining banned. The central bank, which has been pushing forward the pilot of its central bank digital currency, the digital ruble, has suggested punishing crypto trading and issuance with fines up to 500,000 rubles ($6,360) for individuals and 1 million rubles for companies, TASS news agency reported.

In the press release, the Ministry of Finance said the objections of the Bank of Russia “will be considered in the further work on this bill where they don’t contradict the Ministry of Finance approach.”

The official text of the bill is not yet available in the online database for legislative documents.

The bill treats crypto as an investment tool, not a legal tender, and says cryptocurrencies may not be used to pay for goods and services. It also specifies requirements for cryptocurrency exchanges and over-the-counter desks, which must satisfy certain criteria to obtain a license and be included in a dedicated government register. Foreign crypto exchanges must register legal entities in Russia to provide services in the country.

All cryptocurrency-to-fiat transactions must be conducted through bank accounts, and users must go through know-your-customer (KYC) checks with both banks and cryptocurrency exchanges, the press release said.

Exchanges also will have to inform users about the risks of investing in crypto. Investors will have to pass online tests to ensure they have sufficient knowledge about cryptocurrencies and related risks. Those who pass the test can invest up to 600,000 rubles a year in crypto; those who don’t are limited to 50,000 rubles. Qualified investor won’t have any limits.

Cryptocurrency exchanges must keep their own crypto and their users’ funds in separate accounts and maintain a record of all their users’ crypto addresses. Users must not be held liable for any debt of their exchanges.

Cryptocurrency mining will also be regulated under proposed bill. It will be supervised by dedicated government agencies, the press release said, without providing further details.

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