Digital wallet scheme: Key considerations and impacts on liquidity (Current Issue No.3484 Full Ed.)

• The government's plan to forge ahead with the 500 billion baht digital wallet scheme may not have a significant impact on the overall liquidity of the system, as it depends on the program’s finalized conditions and number of eligible participants. However, raising hundreds of billions of baht before the implementation of the scheme may impact the liquidity of the Thai financial market, amid the current situation where financial institutions already hold a substantial amount of government bonds.
• Moreover, the increased supply of debt instruments may affect the fundraising costs of both the public and private sectors.
• Therefore, the government must consider the appropriate timing, budget, and fundraising channels and tools to mitigate potential market impacts.