Thailand’s cash splash will be a digital payments landmark
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Southeast Asia

Thailand’s cash splash will be a digital payments landmark

Thailand wants to give almost every adult in the country money through a digital wallet. It’s an interesting step towards bringing digital finance to the mainstream.

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Photo: Reuters

An interesting social and digital experiment is set to unfold in Thailand – but it rests upon delivering a tricky election promise.

Prime minister Srettha Thavisin took power in August, perhaps assisted by an election pledge to distribute money to ordinary Thais through digital wallets. In November, Srettha spelled out how the policy would work: an outlay of Bt500 billion ($14 billion), equivalent to 3% of GDP, distributed to anyone earning less than Bt70,000 or with less than Bt500,000 in bank savings, which equates to about 50 million citizens. Each will get Bt10,000 ($280).

But there’s a condition: that money must then be spent, starting within six months of receipt, on food, consumer products and non-alcoholic beverages, and only within the recipient’s electoral districts.

The idea, therefore, is not to encourage savings but spending and economic growth. It’s classic stimulus – though perhaps oddly timed in an inflationary environment, and a measure that will widen the fiscal deficit. It’s part of Srettha’s commitment to gain pace with Asean neighbours such as Vietnam and Indonesia, which are experiencing better rates of growth.

A state-mandated handout through digital means covering almost the entire adult population of the nation is another step towards total digital inclusion

But the really interesting part of it is the digital side: the intention is to use blockchain technology through a mobile app called Pao Tang, allowing the government to trace transactions and avoid cheating, but also putting digital money and blockchain technology directly into the mainstream.

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