From 8.00 on 1 August Thai citizens with
smartphones (58m.) can register for the 10,000-baht (US$280) digital wallet handout through the Thang Raj App (Government Way – see below). The wallet – worth about 2/3 of the average national nation income – is available to Thais age 16 or older with incomes under US$23,000 and savings under US$13,700. Potentially, this could involve as many as 45m people with a cost of US$13.8m to the national budget spread over two years.[1] By 9.30am on August 4 it was reported that some 23.7m had already registered (Bangkok Post 42024a). It is expected that the wallets will be rolled out during the final quarter of the year.
For those without smart phones, an extended period of registration will start on September 16, involving basic phones (with a one-time passcode) and walk-in centres including community centres, post offices and government savings banks (Bangkok Post 2024b).
The overall aim of the scheme is the stimulation of the economy through the promotion of consumption amongst lower-level earners and at the local level through increasing the circulation of money (Nation 2024a); while promoting digitisation, particularly of small-scale enterprise, and digital inclusion of citizens (Nation 2023).
The wallet can only be spent in registered businesses – registration is scheduled to start on October 1 and registered businesses are also expected to use the Thang Raj App, though the exact details are not yet available. According to the Commerce Ministry, 1.6m shops are eligible including 910,000 businesses under the Business Development Department, 146,000 blue-flag grocery stores and 5,000 blue-flag food shops (Nation 2024). Excluded are major retailers, wholesalers and department stores (Bergin and Jose 2024), with the emphasis on small and localised business, including road-side stalls and farms.
For the wallet user, spending must take place within 6 months of receipt, is restricted to their domicile district,[2] and cannot be spent on 18 specified items and services – including alcoholic drinks, tobacco products and lottery tickets.[3] These restrictions are built into the wallet, that is, the digital money it contains is programmed (Bangkok Post 2023a).
Thang Raj App
Thang Raj App plays a crucial role in Thailand’s digital wallet project as the official application for registration and implementation, which in turn is significantly promoting the use of the App – which gives access to a wide range of government services previously accessible through a range of much more specific applications but had been slow to gain traction. Thank Raj is being promoted as being more accessible and offering greater security through a blockchain-based log, and is regarded as a key element in the country’s national digitalisation drive (Bangkok Post 2023b).
Delays and Debates
The scheme was originally proposed in 2023, but there has been much controversy over the cost, funding mechanism, likely effectiveness, lack of focus on the poorest groups and need. The latter has been questioned, in particular, by the Bank of Thailand (BoT), given that private consumption is projected to grow by 4% this year (Bangkok Post 2024c). This is part of a much wider criticism of government economic policy, and the lack of focus on the structural issues which the Bank sees as the critical problem (Biometric 2024).
The debates over the digital wallet have been further complicated by the tangled web of Thai politics. The scheme was a major campaigning policy of the Pheu Thai Party, which won the 2023 election but was prevented from forming a government by the Constitutional Court. The resultant protracted negotiation of a coalition government both delayed the digital wallet scheme and renewed the debates. This has seen the argument for the digital wallet shift towards its importance for enhancing the national digital infrastructure and preparing the ground for the introduction by the BoT of Central Bank Digital Currencies (CBDCs) (Bangkok Post 2023a; Euromoney 2023).
The Digital Wallet and CBDCs
While the BoT says it has no immediate intention of implementing a domestic retail CBDC, this is a major aim of the Bank (Bank of Thailand 2021) as is developing cross-border wholesale CBDC systems through Project mBridge. This is a collaborative scheme aimed at developing a multiple-central bank digital currency platform to facilitate wholesale cross-border payments. It involves the BIS Innovation Hub, the Bank of Thailand, the Central Bank of the United Arab Emirates, the Digital Currency Institute of the People’s Bank of China, the Saudi Central Bank and the Hong Kong Monetary Authority.
While the development of CBDCs and the digital wallet scheme serve different immediate purposes, they share the long-term goals of enhancing financial inclusion, efficiency, and fiscal control, and their implementation could intersect in several critical ways (Bag 2024). Notably, a digital wallet could familiarise the public and small businesses with digital financial transactions, and gauge their readiness to use such technology. While the infrastructure developed for the digital wallet could integrate with the CBDC framework, facilitating smoother transitions and interoperability between different digital payment systems (BIS 2021), the large volume of transaction data generated by both the digital wallet and CBDC can offer real-time economic insights, helping policymakers make informed decisions and provide better control over monetary policy and financial stability (Bank of Thailand 2021).
Conclusion
The launching of the digital wallet and the Thang Raj App mark an important step in the development of Thailand’s digital infrastructure. While the impact of the digital wallet on private consumption will be closely watched by policymakers, so will the operation of system, the level of take-up and the reaction of users. The latter is critical for building the
trust necessary for the BoT to launch a domestic retail CBDC.
It would also have implications for the potentially much more impactful cross-border CBDC under the mBridge Project with both developments being critical to Thailand’s goal of becoming a regional digital leader (Nation 2023).
