- The Pheu Thai Party, Thailand’s new ruling coalition, intends to issue a 10,000 baht ($285) utility token as an economic stimulus to every citizen aged 16 and above in early 2024.
- The utility token will be blockchain-based, accessible via a digital wallet, and will be restricted to spending within 4 kilometers of one’s residence on essential items like food, water, and medicine.
A Paradigm Shift in Economic Stimulus: The Blockchain Solution
Thailand’s newly elected coalition party, the Pheu Thai Party, is set to disrupt traditional economic stimulus methods by implementing a blockchain-based utility token system. This initiative will channel 10,000 baht (approximately $285) to every Thai citizen aged 16 or older in early 2024. The digital tokens will be issued through a blockchain-supported digital wallet, in alignment with the party’s broader strategy of promoting a nationwide, blockchain-based financial payment system.
The Utility Token: More than Just a Digital Currency
Utility tokens are unique blockchain assets designed for specific use-cases within a given ecosystem, distinct from the more commonly understood cryptocurrencies like Bitcoin or Ethereum. Unlike direct cash handouts, these tokens will restrict spending to a 4-km radius of a recipient’s home and can only be used to purchase certain essentials like food, water, and medicine. This localized restriction aims to drive economic activity within local communities. Additionally, the tokens are not transferable for cash and will expire after six months. This ensures that the funds are spent, thereby stimulating economic activity.
The Pheu Thai Party’s approach leverages blockchain’s transparency and immutability, linking the utility tokens to national identity systems. This means that even those without mobile phones can access their allocated funds through an identity-based code. The choice of blockchain technology enables a highly secure, traceable, and efficient distribution of resources, mitigating the risk of fraud or misallocation.
Potential Synergies with Thailand’s CBDC and Existing Infrastructure
Interestingly, the Bank of Thailand has been a pioneer in Central Bank Digital Currency (CBDC) research, even running a 10,000-person pilot for a digital baht. While it remains unclear whether the utility tokens will be integrated into this ongoing CBDC project, their introduction could potentially harmonize with Thailand’s larger digital finance roadmap.
Furthermore, Thailand already has a digital wallet solution, the Pao Tang app, developed by the state-controlled Krung Thai Bank. This app was previously employed for government stimulus distribution, making it a feasible platform for the new utility tokens should the government decide to not favor a bank-centric solution.
Given the scale of the program, estimated at a cost of 560 billion baht ($16 billion) and projected to boost the GDP by 3%, this initiative stands as an unprecedented application of blockchain technology in state-level economic policy.