Monetary and Financial Perspectives on Retail CBDC in the Thai Context

Thitima Chucherd, Chanokkarn Mek-yong, Nalin Nookhwun, Passawuth Nuntnarumit, Natta Piyakarnchana and Suparit Suwanik

No 152, PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: This paper explores three monetary and financial issues of retail central bank digital currency (CBDC) in the Thai context. The first insight shows that opportunities in the digital age may arise for Thai citizens and businesses to reap the benefits of a more efficient form of public money and financial innovation. It is possible for Thai citizens to quickly adopt unremunerated CBDC for transactional use within a decade. Second, we point out that there are several ways to utilize retail CBDC for enhancing monetary policy effectiveness, namely, through the bank rate channel and the introduction of new monetary policy tools. Nevertheless, monetary policy should not be the first and foremost objective for the central bank to issue CBDC as there are other factors to consider. These included impacts on the central bank balance sheet and monetary operations, especially for remunerated CBDC. Disintermediation and liquidity risks for Thai financial institutions are also key concerns, which are discussed in the third part. We assess that the risks to the banking sector are low in normal periods, but the well-designed CBDC features are necessary to prevent mounting liquidity risks in distressed periods.

Keywords: CBDC; Digital Currency; Digital Money; Financial Landscape; Monetary Policy; Financial Stability (search for similar items in EconPapers)
JEL-codes: E41 E42 E52 E58 G21 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2021-05
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac, nep-mon and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.pier.or.th/files/dp/pier_dp_152.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pui:dpaper:152

Ordering information: This working paper can be ordered from
https://www.pier.or.th/en/dp/152/

Access Statistics for this paper

More papers in PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ().