Thailand’s ambitious plan to distribute digital currencies to its citizens as part of an economic recovery initiative has encountered delays, as government officials request an extension of the launch date.
Initially slated for early 2024, Deputy Finance Minister Julapun Amornvivat revealed the need for more time to develop a secure system for the proposed plan. Amornvivat expressed confidence that the Finance Ministry could address these concerns before the end of the first quarter of 2024.
“The Prime Minister instructed us to be ready to hand out the money by Feb 1, but I am ready to tell him that we cannot make it because we must take time to develop a stable and secure system,” Amornvivat explained. “We cannot trade the system for time.”
Thailand’s new government, under the leadership of Srettha Thavisin, had announced a bold plan ahead of the last general elections, intending to provide THB 10,000 (US$285) to each citizen above the age of 16 through digital wallets. Recipients would be limited to spending the sum within a four-kilometer radius of their primary residence within six months.
This initiative is expected to cost the government up to THB 548 billion (US$15 billion). Proponents, particularly within the ruling Pheu Thai Party, argue that the program could boost the country’s GDP by up to 5% in a year. The Bank of Thailand takes a more cautious stance, projecting a 3% boost, with a definitive economic forecast expected in the coming weeks.
Apart from security concerns, the government is still grappling with the funding source for the project. Amornvivat mentioned that a cabinet subcommittee is exploring various sources, including borrowing or tax increases.
Critics have raised concerns about the risks of increasing public debt to fund the scheme. Former Senator Rosana Rositrakul, in a petition to the State Audit Office (SAO), urged an investigation into the legality and rationale of the project, citing potential violations of the Fiscal Discipline Act and debt concealment.
“The 10,000-baht digital wallet scheme can be compared to the rice-pledging scheme of the Yingluck Shinawatra government which resulted in several cabinet ministers being jailed,” Rositrakul pointed out. “I, as a taxpayer, am doing the duty of a citizen in calling for concerned organizations to look into this matter.”
Given these concerns, there is speculation that the government may revise the plan to only include indigent citizens in order to reduce costs.
Hope for Digital Asset Firms
Following the high-profile issues involving Three Arrows Capital (3AC), Celsius, and Zipmex, Thai authorities had imposed strict regulations on the local digital currency industry. These regulations included bans on service providers offering staking and lending services, as well as requiring disclosures on all digital asset promotions.
As the repercussions of these incidents waned, Thailand announced plans to waive up to $1 billion in taxes for investment tokens, aiming to stimulate growth in the sector. The government’s adoption of blockchain for its new economic initiative is seen as a positive sign for the digital asset industry.
