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Thailand’s central bank is predicting the Pheu Thai Party’s planned THB 10,000 (US$285) digital handout scheme will promptly and positively impact the local economy.
The Bank of Thailand anticipates a 3% GDP growth in the country due to the recent injection of funds, estimating the entire project’s cost at nearly TBH 560 billion ($16 billion), according to a report by the Bangkok Post.
In the build-up to the last general elections, the Pheu Thai Party promised to roll out an initiative to see each citizen above 16 receive $285 via digital wallets. Following an unlikely coalition that installed party member Srettha Thavisin as the new Prime Minister, the party disclosed that it would be working ahead with the plans.
นอกจากการสร้างรายได้จากการท่องเที่ยว การค้า และการลงทุน ที่จะนำเงินนอกมาปลุกเศรษฐกิจไทยให้เงินไหลเข้าประเทศ… pic.twitter.com/BSs9rvXbBK
— Srettha Thavisin (@Thavisin) August 29, 2023
“Now the situation has changed and Pheu Thai is now the core (of a new coalition),” said Deputy Secretary-General Paopoom Rojanasakul. “Today, the party would like to officially declare that it will move ahead with the digital wallet policy, using blockchain technology.”
The initiative will transfer funds to the digital wallets of citizens, accessible through the use of national ID cards, with the requirement for funds to be spent within six months of issuance. According to the Pheu Thai Party’s plans, the funds cannot be converted to cash or other assets and can only be spent within a four-kilometer radius of the residence of citizens.
Widely touted as an “economic tsunami” for the country, the scheme is expected to kick off in 2024, with party officials downplaying the inflation risks.
While the party sees a 5% economic growth, the Bank of Thailand is adopting a conservative approach with its 3% initial forecast. The banking regulator relied on a one-time cash transfer multiplier model to make its prediction, noting that it will issue a definitive forecast in the coming weeks.
The central bank noted that it is waiting for the ruling party to make detailed disclosures concerning the proposed policy to make new robust predictions concerning its economic impacts.
A changing stance for digital assets
Following a negative stance by Thai regulators toward the local digital currency ecosystem, experts have pointed out that the new regime could soften its industry handling. The immediate reliance on blockchain technology for its primary economic policy is seen as proof of a changing stance by the government.
Over the last few months, Thai regulators have imposed stiff compliance rules for digital asset service providers, culminating in a blanket ban on lending services. Authorities took it up a notch with a threat to expel Facebook (NASDAQ: META) from the country over its failure to clamp down on fraudulent digital asset investment schemes.