Assessing disruptive potential of retail central bank digital currency and influence of design considerations : an open innovation approach in Thailand

Monetary authorities globally have studied central bank digital currency (CBDC) for wholesale and retail applications since the 1990s. Besides countering private cryptocurrencies' influence, central banks have also explored other benefits of CBDC, such as improving their financial oversight, enhancing digital payment systems, and reducing transaction fees and friction. For several years, the Bank of Thailand has also invested in research and development of CBDC, including retail use cases. However, an optimized design for an official launch of a retail CBDC in Thailand has yet to be determined, resembling fragmented progress observed among other central banks. This research has leveraged disruptive innovation theory to provide a fresh perspective on retail CBDC as potentially disruptive financial innovations. Additionally, it has proposed an open innovation-based methodology to determine industry preferences concerning twelve design considerations for retail CBDC and their impact on nine indicators of disruptive innovation. Data has been collected and analyzed from 98 respondents outside the Bank of Thailand, all possessing relevant expertise or experience in electronic payments. Crosstab and logistic regression analyses have indicated that retail CBDC in Thailand could embark on a disruptive innovation trajectory by adhering to defined design choices. Significantly, entering a new detached market has been identified as the most promising entry point, accompanied by explicit recommendations on nine out of twelve design considerations.