One of the big issues lately that is widely talked about and debated on social media is the announcement of the Pheu Thai Party’s policy on a digital top-up of 10,000 baht for all Thai people of old age. 16 years or more, spending near home within a radius of 4 kilometers via Digital Wallet, with the aim of stimulating the village-level economy in the local market, creating transactions between retailers.
One of the interesting policy details is the introduction of “Blockchain technology” Let’s create a digital wallet to create terms of use that will make the policy possible.
On this issue, Mr. Apinut Dejdonbom, Senior Analyst at Cryptomind Advisory Company Limited, Thailand’s first digital asset advisor under the supervision of the SEC, gave his thoughts. agrees to this policy that using blockchain technology to make a digital wallet may not be appropriate for a reason The effect of some design limitations which are noted are as follows.
Blockchain technology has a limitation in terms of design due to what is known as the Blockchain Trilemma or blockchain fundamentals 3 There is no way they could happen at the same time. consisting of security (Security), expansion to support future use (Scalability) and decentralization (Decentralization), which the first option is impossible, other than security, to make a blockchain system that can support massive transactions from many populations. Tens of millions of people would have to choose Scalability as their second choice. That means losing. Decentralization to
In addition, there is no need for a government payment system to open up to a public blockchain (Public Blockchain), which opens the details of the system structure to the general public, making the choice impossible other than the Private Blockchain. To make it possible for all citizens to use it without being stuck, this digital wallet must be a custodial wallet that makes decentralization even less.
which makes the overall system may not differ from using a traditional database system that may even be more efficient In addition, there is currently no case study of blockchain that can support Transactions at the level of tens of millions of transactions per day can be tangible.
For this reason, we think that the most interesting option for making this digital wallet is an application. “wallet” that already exists and expects that the “Pao Tang application” can set the conditions It’s not difficult. There is a history of supporting transactions from real use from previous projects. People are already familiar with wallet applications. In addition, using the existing wallet application will be able to Save budget for new system development and maintenance as well.
Another issue that has been discussed is the digital wallet’s relationship with the Central Bank Digital Currency (CBDC), which we do not see as being related in this regard. Since the Bank of Thailand has its own development guidelines, the Retail CBDC is currently undergoing a pilot test between the end of 2022 and the middle of 2023 in collaboration with Bank of Ayudhya Public Company Limited, Siam Commercial Bank Public Company Limited and 2C2P (Thailand) Co., Ltd.
If the pilot test has a problem or there is a point that needs to be fixed, it must be redeveloped and the pilot test again and again until it is complete, which may take several months or even years because the CBDC will be an infrastructure of the country that cannot be rushed. can be accelerated, causing the Timeline may not match the enforcement Such a policy, if the Pheu Thai Party becomes the government
Furthermore, one of the most important aspects of CBDC design is the privacy andthe power to own money of the peopleThis policy has a limit on the distance that can be used and has a period of use that if it is not used, it will disappear if it is not used. There is also mention of surveillance. transactions and usage behavior with
If the aforementioned conditions are imposed on the CBDC, it may cause the public to see that the collection of money in the form of CBDC is not safe, which is contrary to the principles of the central bank that have always been used in the development of CBDC and may cause the banks to The nation has done all these years in vain. This is why we consider digital wallets and cryptocurrencies unlikely to be associated with CBDCs.
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