Thailand ranked first for wholesale CBDC development, PwC says

Central banks in Thailand and Hong Kong SAR have the most mature interbank/wholesale central bank digital currency (CBDC) project in the world, a report by PwC reveals.

The “PwC Global CBDC Index 2021” analyses central banks’ level of maturity in deploying their own digital currency, including tracking their progress and stance on CBDC development.

Vilaiporn Taweelappontong, Consulting Lead Partner and Financial Services Leader for PwC Thailand, said the PwC index ranks the world’s most advanced CBDC projects in terms of retail CBDCs held directly by corporations and citizens, and interbank/wholesale CBDCs restricted to financial institutions for interbank payments and financial settlement processes.

Thailand and Hong Kong SAR topped the rankings as the world’s most mature interbank/wholesale project. They both achieved a score of 80 due to the Project Inthanon-LionRock initiated by the Bank of Thailand (BOT) and the Hong Kong Monetary Authority (HKMA).

“Project Inthanon-LionRock is by far the most advanced wholesale CBDC project both in terms of the design and overall development,” Vilaiporn said.

“In 2019 the two central bank authorities initiated the project to test the application of CBDC to cross-border payments, leading to the development of a software prototype both for cross-border settlements and a range of other uses,” she said.

Now in phase two, the joint project is evolving from bilateral cross-border uses to functions involving multiple jurisdictions and currencies that are further enhancing the financial infrastructure for cross-border payments.

In February 2021, the Central Bank of the United Arab Emirates (CBUAE) and the Digital Currency Institute of the People’s Bank of China (PBC DCI) joined Project Inthanon-LionRock and renamed the project as “Multiple Central Bank Digital Currency (m-CBDC) Bridge[1]”, or “m-CBDC Bridge”. It will study potential outcomes in a multi-jurisdictional context as it evaluates the feasibility of the project.

“CBDCs can offer less costly transactions and improve the overall efficiency of the country’s entire payment system, especially when using blockchain technology to create a safer, more transparent and modernised monetary ecosystem,” Vilaiporn said.

More than 60 central banks have already entered the digital currency race, according to the report.

Retail CBDC initiatives are particularly strong in emerging economies, where financial inclusion and digitisation appear as key drivers. Meanwhile, interbank/wholesale CBDC projects are gaining strength in developed economies where interbank borrowing and capital markets are more prominent, it said.

The retail CBDC ranking placed the Bahamas at the top (with a score of 92) for its Sand Dollar, the world’s first digital currency issued by a central bank. This was followed by Cambodia’s Project Bakong (83). Both projects are now live.

Three CBDC trends to watch out for in 2021

A PwC report also identified three CBDC trends to watch out for this year as follows:

  1. CBDC projects are gaining traction: With more than 60 central banks exploring CBDCs since 2014, some projects are now entering the implementation phase. Institutional involvement in CBDCs will continue to strengthen the ecosystem at large, with public stakeholders such as the Bank for International Settlements (BIS), the World Bank, the International Monetary Fund (IMF) and the World Economic Forum (WEF) all playing an active role.


  1. CBDCs are now live and transactional volumes should be interesting to monitor: Whilst there are two live retail CBDCs in the world, no interbank/wholesale CBDC projects have reached this maturity level yet. Nearly 70% of declared wholesale projects are already running pilots, while only 23% of retail projects have reached the implementation stage.


  1. Blockchain is the technology of choice: More than 88% of CBDC projects, at pilot or production phase, use blockchain as the underlying technology. This technology brings several benefits to CBDC developments including:
  • Integrated platforms built by design to share value and transfer ownership in a secure way, which is key to supporting digital money;
  • Smart contract programmability, supporting CBDC as a new form of programmable monetary instrument that could trigger automatic payments based on pre-programmed conditions;
  • Transparent audit trails;
  • Configurable confidentiality features;
  • Increasing interoperability with other digital assets.

“The next step of CBDC development in Thailand is to accelerate its very advanced pilot wholesale CBDC initiative to a live project. Meanwhile, the central bank is seeking public opinions until the middle of June on developing and issuing a retail digital currency. 

“We believe that exploring the potential of retail CBDC will help to open doors for more diverse and inclusive financial services for citizens. Introducing CBDC can improve tax collection and better manage money-laundering risks. However, further understanding the implications for monetary policy and the evolving roles of a central bank and financial institutions will all be key factors driving the future success of the country’s digital currency development.” Vilaiporn said. 

[1] BOT Press Release No. 11/2021: Joint statement on the Multiple Central Bank Digital Currency (m-CBDC) Bridge Project, Bank of Thailand

Source: PwC Thailand