The problem is that the conventions evolved for a positive interest rate environment, and efforts to reverse the direction of these incentives can lead to bad economic outcomes for society. Furthermore, it is costly to change these conventions. In many economic arrangements, including debt and tax payments, people can prepay debts or tax obligations, or make excessive payments on them, and earn a zero return during the prepayment period. For example, suppose that one holds a credit card under existing U.S. rules: one can withdraw funds from an account that is earning a negative rate, and pay one’s  5  Kenneth Garbade and Jamie McAndrews, “Interest-Bearing Securities When Interest Rates are Below Zero,” Liberty Street Economics blog, May 4, 2015. 6  “NEGATIVE INTEREST RATES ON MORTGAGES” Working Group on negative interest rates on mortgages, Business and Growth Ministry, Denmark https://www.evm.dk/~/media/oem/pdf/2015/15–04–28-negativerenter.ashx. 6  BIS central bankers’ speeches  debt to the credit card company in advance of when it is due, earning a zero return during the prepayment period. Similarly, one can make excessive tax payments to the taxing authority, and earn nothing during the period before one receives a refund, thereby avoiding negative deposit rates at banks. Such “zero nominal rate” conventions abound in society, and the lower the negative rate, the more people will search for such ways to avoid the negative rates that might prevail elsewhere.

Over the past few years, manufacturers have invested heavily in machineries and systems to increase utilization of automation as evidenced by increasing robot installations in Thai factories4. Firms in non-manufacturing sector are also moving fast in adopting new technologies—from banks and telcos offering more efficient digital financial services; shops abandoning physical storefront and employing e-commerce and social-commerce platforms; and to firms advertising through social media platforms. To encourage further technological adoption and improve adaptive capabilities, to ultimately build resilience, it is also important that regulatory environment is conducive to fostering innovations. And it is with this goal of facilitating innovative environment that the Bank of Thailand took on a number of initiatives in recent years. These include  Continuing regulatory reform on foreign exchange regulations to remove outdated requirements, allow for greater flexibility in foreign exchange management, and improve ease of doing business;  Relaxing money transfer business ownership requirements to allow for greater competition and reduce cost of cross-border money transfer;  Streamlining our regulatory sandbox scheme to allow new fintech products to reach market faster;  Collaborating with the banking industry to explore use of central bank digital currency for domestic wholesale banking settlement operations; and  3 For instance, Thailand is ranked top ten in number of Facebook users according to Statista (2019). https://www.statista.com/statistics/268136/top-15-countries-based-on-number-of-facebook-users/  4 According to International Federation of Robotics, Thailand’s robot sales increased by over 30 percent between 2015 and 2017 and are expected to grow at an annual average of more than 20 percent over the next three years.