BANGKOK - Thailand's central bank plans to test its retail digital currency for the public in the second quarter of 2022 as an alternative payment option, an assistant governor said on Thursday.

The retail central bank digital currency (CBDC) will not affect monetary policy or money supply in the system, Vachira Arromdee told a news conference.

The pilot project will evaluate the use of the CBDC in cash-like activities within a limited scale, such as accepting, converting, or paying for goods and services, she said.

The Bank of Thailand (BOT) predicts demand for the CBDC will gradually increase and that it could become an alternative payment option, partially substituting cash and e-money, it said in a statement.

The BOT will assess results and risks from the test to ensure that the CBDC is beneficial to all and does not undermine economic and financial stability in the future, it said.

(Reporting by Orathai Sriring and Kitiphong Thaichareon; Editing by Martin Petty) ((orathai.sriring@tr.com;))