Thailand’s recently elected government is determined to fulfill its promise of providing a significant financial boost to its citizens. This financial support will be distributed using blockchain technology and cryptocurrency wallets, totaling 10,000 Thai baht (around $280).
As reported by the Bangkok Post on September 7, the Thai government, led by the Pheu Thai party, is taking an innovative approach to economic stimulus by embracing blockchain technology. The decision to utilize a highly secure blockchain not only ensures complete transparency but also enables easy tracking throughout the entire distribution process.
Recipients of this financial aid will receive their funds via a digital wallet, which they can use for six months at local businesses within a four-kilometer radius of their registered address. This strategic move injects much-needed capital directly into local economies and increases access to digital finance.
To access these funds, recipients must download the newly introduced national wallet app on their smartphones. This user-friendly approach is designed to simplify the process and encourage widespread participation.
Economic Impact and Concerns
The economic impact of this initiative is significant. The expected injection of 2 trillion baht, roughly $56 billion, into the economy is projected to contribute to a substantial 5% growth in GDP by 2024, according to Deputy Finance Minister Julapun Amornvivat.
However, critics have expressed concerns about the source of funding for this initiative, fearing it might become a financial burden for taxpayers. Additionally, the government’s appointment by the military-backed senate has sparked debates about the legitimacy of the current administration.
This move toward digital finance could also pave the way for introducing Thailand’s Central Bank Digital Currency (CBDC). The successful CBDC pilot program conducted in collaboration between the Bank of Thailand and three payment service providers in June suggests that Thailand is moving toward a digitally focused financial landscape.
Furthermore, Thailand is actively working on a national digital ID system that promises seamless integration with retail digital wallets once rolled out nationwide.
Critics have raised concerns about potential privacy and financial autonomy issues related to state-controlled programmable money. An unanswered question is how the Thai government plans to monitor and regulate the spending of these distributed funds within specified limits. Striking a balance between providing essential financial support and ensuring responsible fund utilization remains a challenge for the government.
Potential Future Developments
Thailand’s bold step toward a digital-first approach to distributing financial aid will likely have far-reaching consequences. By embracing blockchain technology and digital wallets, the government provides immediate relief and lays the foundation for a more technologically advanced financial landscape.
The success of this initiative could serve as a precursor to further developments, including the introduction of a Central Bank Digital Currency and a national digital ID system. However, the government needs to address concerns raised by critics regarding funding sources and privacy issues while navigating these future possibilities.
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