In brief
Thailand continues to advance its digital payment landscape through a phased approach. The Bank of Thailand (BOT) began with wholesale Central Bank Digital Currency (CBDC) pilots under Project Inthanon and mBridge and Retail CBDC project. Building on this momentum, the BOT launched the Programmable Payment Sandbox (Stablecoin Sandbox) in 2024 — later expanded in December 2025 — to safely test Thai Baht backed stablecoins and programmable payment solutions. Looking ahead, tokenized deposits are emerging as a promising next step — offering the familiarity and regulatory comfort of traditional bank deposits while adding the efficiency and programmability of blockchain — even though a dedicated regulatory framework has not yet been established in Thailand. This area is rapidly gaining global momentum and is expected to become a key focus in the next phase of digital financial innovation.
In more detail
This Client Alert highlights key regulatory developments shaping Thailand's integration of digital assets into payment systems, summarized as follows:
1. Thailand's CBDC development: Key initiatives and progress
Since 2018, the BOT has been actively advancing CBDC initiatives to strengthen Thailand's payment infrastructure. The effort began with Project Inthanon, a wholesale CBDC project utilizing Distributed Ledger Technology (DLT) to introduce features such as cash tokenization, decentralized fund transfers, bond tokenization, and interbank trading. These developments aim to reduce settlement times and enhance regulatory compliance.
Alongside wholesale CBDC work, the BOT has also been progressing in retail CBDC development. Concluded in 2024, the retail CBDC pilot involved real-value transactions by retail users and covered the full lifecycle — from CBDC issuance and burning to processing and transaction validation by the BOT. Financial service providers distributed CBDC and managed user wallets via a dedicated mobile application, enabling peer-to-peer transfers and merchant payments within a controlled scope. While the BOT currently has no plans for full-scale retail CBDC issuance, insights from the retail CBDC pilot will be further used for the enhancements to payment systems, including programmable payments for businesses and asset tokenization.1
2.Thai Baht-backed Stable Coin: Programmable Payment Sandbox
Under its Enhanced Regulatory Sandbox,2 the BOT introduced the Programmable Payment Project in 2024, followed by a significant expansion on 24 December 2025. Commonly referred to by the public as the "Thai Baht-backed Stablecoin Sandbox," the initiative enables controlled experimentation with DLT and smart contracts for condition-based payments. In this expanded phase, the BOT has opened participation with applications accepted from 24 December 2025 onward and no current deadline for submission. Previously, the testing period was capped at one year. In this new round, the duration of the testing period will be determined by the BOT on a case by case basis, taking into account each participant's business plan, technology readiness, risk management framework, and the project's potential benefits. As a result, testing period for each participant may extend beyond one year under the new approach.
Eligible participants include regulated financial institutions, fintech companies, and other approved entities. Use cases under testing may include automated payments for goods and services, escrow arrangements, and asset tokenization, all utilizing digital units pegged to the Thai baht.
Key requirements for the testing project under the sandbox include:
- Value Peg: Electronic units (THB-backed stablecoins) issued for testing purposes must maintain a fixed value, pegged 1 unit = 1 THB.
- Reserve Requirement: Having a mechanism to preserve this fixed value by holding an equivalent amount of unencumbered Thai Baht in a segregated account at a licensed financial institution.
- No Use of Reserves: The reserved funds shall not be used for any purpose.
- Redemption Rights: Holders of the stablecoin must have the right to redeem for Thai Baht.
This Sandbox reflects the Bank of Thailand's efforts to keep pace with global trends by allowing businesses to test real use cases within this controlled environment.
3. Tokenized deposit
On a global scale, tokenized deposits are digital representations of traditional bank deposits issued by regulated financial institutions. Unlike stablecoins or CBDCs, they combine the regulatory oversight of conventional banking with the efficiency, speed, and programmability of blockchain-based transactions. As tokenized deposits are normally treated as traditional bank liabilities subject to existing banking regulations, they are positioned as the most practical near-term solution for enabling on-chain payments in tokenized asset markets.3
In Thailand, there is currently no specific regulation governing tokenized deposits. However, it is anticipated that any such product would fall under the existing legal framework applicable to traditional deposits. This means commercial banks issuing tokenized deposits would still need to comply with the requirements under existing laws and regulations, including relevant Notifications of the Bank of Thailand mandating customer identification and verification, and disclosure obligations (e.g., clear publication of interest rates, terms, and fees). Additionally, tokenized deposits should remain subject to the Deposit Protection Act B.E. 2551, as amended, which provides coverage up to THB 1 million per depositor per institution for eligible deposits, mandates reporting of depositor data, and requires contributions to the Deposit Protection Fund. This alignment with existing banking regulations ensures that tokenized deposits can deliver both innovation and consumer protection, while also leveraging a regulatory scheme that regulators are already familiar with. As a result, it helps reduce resistance to the adoption of tokenization in the financial sector and strengthens the case for scalable implementation within Thailand's evolving digital finance ecosystem.
There are also important considerations regarding the appropriate regulatory treatment of tokenized deposits — particularly whether they should fall under the SEC's supervision. While the issuance of digital asset and the provision of related services generally fall within the remit of the Securities and Exchange Commission (SEC), the nature and purpose of tokenized deposits — especially their potential use as a medium of payment — suggest that a different approach may be more appropriate. To avoid regulatory overlap and ensure legal clarity, it is advisable to also involve in the conversation with the SEC around the possibility of exempting tokenized deposits from the requirement to obtain approval for issuance and supervision under the SEC's regulatory framework. At this stage, this regulatory treatment of tokenized deposit by the SEC remains to be seen.
Looking ahead
The developments outlined in this alert reflect Thailand's accelerating integration of digital assets into its payment systems, with financial institutions and fintech operators expected to play an increasingly significant role. While the regulatory framework for programmable payments continues to evolve, tokenized deposits have globally emerged as a particularly promising area due to their alignment with existing banking regulations and market familiarity. As the convergence between digital assets and payment systems progresses, market participants should proactively assess how these changes may affect their business models and begin preparing for future regulatory requirements — whether they participate as users, service providers, issuers, or developers of new digital payment products.
For more details, please contact our team at Baker McKenzie.
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Phetrada Kampusiri, Senior Associate, and Yanisa Nilkhet, Associate have contributed to this legal update.
1 Bank of Thailand, Retail CBDC Pilot Conclusion Report (March 2023), https://www.bot.or.th/th/financial-innovation/digital-finance/central-bank-digital-currency/newsandmedia/Pilot-CBDC-2024.html
2 "Enhanced Regulatory Sandbox" is the testing of products or services that may be further developed into financial innovations, which the BOT has not yet permitted supervised financial service providers to operate. Such testing is conducted under the supervision of the BOT and within a controlled environment with defined conditions for offering and testing the products or services.
3 Baker McKenzie, Payment Methods for the Age of Tokenization, https://www.bakermckenzie.com/en/insight/publications/resources/payment-methods-for-the-age-of-tokenization