May 26, 2024
Thai Government Faces Doubt Over Digital Money Giveaway Following Council's Report
Policy & Regulation

Thai Government Faces Doubt Over Digital Money Giveaway Following Council’s Report

In a move that has stirred both support and scepticism, the Thailand government’s ambitious plan to distribute 10,000 baht ($286) to over 54 million citizens through digital wallets is encountering potential obstacles. The Office of the Council of State has provided an appraisal of the funding methods, expressing concerns that may pose challenges to the implementation of the economic stimulus.

The Nation, a Thai publication, reported that the Council of State adopted a negative stance on the plan, suggesting that if the government deemed an economic stimulus necessary, it should have enacted it by decree rather than proposing a bill to borrow the required funds. The council contended that funding through legislation could prolong the process by several months.

Deputy Finance Minister Julapun Amornvivat contradicted these concerns, asserting that the council deemed the plan legal and set to be implemented on May 1, as originally expected. However, the council’s opinions, while influential, are not binding.

The report from the Council of State will not be made public, but it allowed the government to disclose its opinion. The Council of State, an advisory body chaired by the prime minister, comprises government members whose opinions carry weight in the decision-making process.

Opposition politicians are gearing up for a “special Senate debate” to address concerns about the plan, among other issues. Prime Minister Srettha Thavisin is reportedly planning a government meeting next week to discuss the funding of the project.

Originally scheduled for distribution on Feb. 1, the plan has faced resistance since its proposal, with some opposition members branding it a risky and unconstitutional election ploy by the pro-crypto prime minister. Supporters, on the other hand, anticipate a 5% growth in the Thai economy as a result of the stimulus.

The delay in the launch, announced in October, was attributed to funding complications and a slower-than-anticipated development of the “super-app” wallet designed to facilitate the fund distribution. Deputy Finance Minister Julapun remarked in October, “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.”

Reports suggest that vendors not integrated into the tax system would be able to use the electronic currency but would not have the option to convert it into cash. Additionally, a mandatory Know Your Customer (KYC) procedure would incur a cost of 100 baht ($2.86) for every user.

It’s important to note that the digital baht in question is distinct from central bank digital currency (CBDC), as Thailand initiated a CBDC sandbox in June, lasting for three months. The Bank of Thailand has clarified that it currently has no plans to launch a CBDC. The unfolding debates and developments surrounding this economic stimulus plan are sure to shape Thailand’s financial landscape in the months to come.

Image: Wallpapers.com

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