Thailand to Issue G-Tokens, Expanding Investment Access with Blockchain

The initiative forms part of the country's budget borrowing plan and targets retail participation.

Thailand’s Finance Ministry is planning to issue 5 billion baht ($150 million) in digital investment tokens that will be offered to retail investors as part of the government’s broader budget borrowing plan, three government officials told Reuters.

The Southeast Asian nation is looking to diversify its funding sources and the move marks a significant shift in the country’s strategy to raise public funds using blockchain-backed assets.

The ministry will issue the tokens, called G-Tokens, within two months and they won’t be classified as debt, the officials said on Wednesday. The tokens will offer an accessible alternative investment channel for individuals who are seeking better returns.

“The Finance Ministry is planning to launch G-Tokens for public fundraising within two months from now,” one of the officials said.

“This initiative will be rolled out as part of the government’s borrowing strategy for the year. The aim is to create an investment opportunity for the people.”

The cabinet has approved the proposal and the tokens will be launched in accordance with central bank regulations, said Finance Minister Pichai Chunhavajira.

“The government’s borrowing plan includes both debt and non-debt instruments, and this fits into that broader strategy,” said Pichai, adding that the initiative could yield higher returns than existing bank deposit rates.

Interest Rates and Savers

The Bank of Thailand recently cut the key interest rate to 1.75%, leading to lower interest income for those holding bank deposits. Rates for deposits at Thai banks currently range from 1.25% to 1.5%, while the benchmark rate is at 1.75%.

The move to lower rates and the introduction of G-Tokens could encourage investors to seek out better capital gains in a low-rate environment.

The G-Token is not being treated as a traditional bond but it will serve the fundraising purpose for the government’s fiscal needs. This allows the state to diversify funding sources without needing to issue more public debt.

The digital model could also help streamline capital inflows from retail participants through a modernized platform.

G-Tokens will serve as a new income-generating option for everyday investors. The Finance Ministry said this issuance will test the token’s market acceptance. It plans to make further issuances if demand shows promise during this pilot phase.

"The government is aiming to diversify its funding sources and the move signals the Southeast Asian nation's ambition in developing the digital economy," said Mohsin Rizvi, managing director for APAC at Viable, a global technology-driven investment management firm.

"There has been a buzz around government-issued tokens in recent times, and it will be interesting to see how this initiative unfolds."

The Southeast Asian nation is rolling out initiatives to support blockchain-based investment alternatives. Earlier this year, the government said it is considering a proposal to issue government-backed stablecoins.

The Pheu Thai-led government, which enjoys the support of former Prime Minister Thaksin Shinawatra, is rolling out several initiatives to support digital financial goals. These include expanding retail and institutional investor access.

The G-Tokens align with these broader goals by merging traditional finance with emerging digital technology.

This move also follows a global trend of countries exploring blockchain to enhance public services and tourism. For instance, Bhutan is using blockchain for notary services, while Dubai is integrating it into its tourism domain.