Funding will come from the 2024 budget and loans from state-run financial institutions.
The central bank initially proposed using a digital baht or central bank digital currency for the distribution, but the format has not yet been finalized.
The Ministry of Finance has no plans to issue an emergency financing order to support the government’s 10,000 baht digital currency distribution, with funding likely to come from the state budget and borrowings from state-owned financial institutions, Crisada said. Deputy Finance Minister Chinavicharana said.
He said the project would be funded from the 2024 budget, but funding for certain programs would be reduced and financed through borrowings from state financial institutions under Section 28 of the State Fiscal and Fiscal Discipline Act of 2018. said.
Article 28 allows the government to order state-run financial institutions to finance projects aimed at improving people’s quality of life or rebuilding the economy.
Each year, the government sets a budget to repay these financial institutions.
The Fiscal Policy Committee has set the interest rate ceiling for these state-owned banks funding state projects under Article 28 at 32% of the government’s total annual expenditures.
As of June, 18 billion baht remains to be borrowed for fiscal 2023.
However, Crisada said the Ministry of Finance expects budget expenditure under Article 28 to be around 100 billion baht in 2024.
Crisada said the implementation of the digital transfer policy will not affect the central bank’s monetary policy.
Part of the budget will come from repayments of loans to state-run financial institutions and from unspent funds from some canceled projects under Article 28.
Additionally, he said the estimated increase in agricultural prices would reduce the availability of subsidy under Article 28, resulting in an increase in the loan limit in addition to the remaining 18 billion baht loan for this year.
The government is consulting with the Bank of Thailand and other relevant institutions on the form of the benefit.
Regulators initially proposed a digital baht or central bank digital currency, but the format has not yet been finalized.
Crisada said the implementation of the digital benefit system will not affect the central bank’s monetary policy.
He said the project should contribute to GDP growth in 2024, but the extent of that contribution will depend on the economic multiplier effect, which is currently being studied.
According to the National Economic and Social Development Council, GDP is expected to grow by 2.8% this year.
Payon Srivanich, chairman of the Thai Bankers Association, said after Thursday’s meeting of the Joint Standing Committee of Commercial and Commercial Banks that the private sector is waiting for the government’s announcement on the 10,000 baht digital benefit scheme.
The Thai Contribution Party-led coalition government plans to use blockchain technology to distribute one-time cash transfers, but some experts favor using the existing Pao Tan mobile app.
Krungthai Bank (KTB), the country’s largest state-owned commercial bank, developed the Paotan app to support the previous government’s cash transfers and economic stimulus package, and it was widely used during the pandemic.
Payon said KTB was also waiting for an announcement on the plan and had no comment on the matter.
The Bank of Thailand is also waiting for more details on the benefit system and other key monetary policies, as well as releasing economic forecasts for 2024, before commenting on safety and compliance issues.
