Bank of Thailand warns government against digital wallet plan

Phumtham Wechayachai, Deputy Prime Minister and Commerce Minister, dismissed concerns about a confidential Bank of Thailand (BoT) document warning the government against the proposed digital wallet handout initiative.

Phumtham, a prominent figure in the Cabinet, stated he was unaware of the document’s contents and questioned its credibility, insisting that if it were a real warning, it would have been officially sent to the government.

“Should a classified document have been leaked that easily?”

Despite not having seen the document himself, the commerce minister expressed a desire to view it.

Phumtham also noted that while the BoT was consulted during several meetings held by the digital wallet policy working committee, the bank did not mention producing a document for review.

He urged not to overfocus on the document, emphasising that coalition parties support the 500-billion-baht wallet scheme. The plan involves a one-off, 10,000-baht digital cash handout to Thai citizens, 16 years old and above, who earn less than 70,000 baht per month.

Phumtham announced the government’s expectation to launch the scheme’s registration in the third quarter of this year, with distribution beginning in the fourth quarter.

Despite his dismissal, a Finance Ministry insider confirmed the existence of a five-page document outlining BoT governor Sethaput Suthiwartnarueput’s apprehensions about the digital handout program. Dated April 22, the document was reportedly sent to the Cabinet secretariat office.

The governor’s suggestions include revising the scheme to better assist those in need, such as low-income earners and other economically vulnerable groups. This would help alleviate the strain caused by the rising cost of living and stimulate the economy.

The document also proposed a phased launch to avoid overextending the budget and maintain fiscal stability. It further argued against the need for large-scale public consumption incentives at this time, which could lead to heavy spending on various stimulus campaigns, reported Bangkok Post.

The document warned that the long-term financial burden created by the scheme could prompt credit rating agencies like Moody’s to downgrade Thailand’s credit rating. This would restrict the government’s borrowing capabilities and damage investor confidence in the economy.