And even what we know and can identify today, our perceptions may be obscured by our perceived understanding based on past world views. There is a fine line between the knowns and the unknowns. Navigating through these will require striking the right balance between having an open mindset to allow innovations to prosper while ensuring that key risks can be contained. For the “known territory,” essentially developments that we have begun to identify use cases, can control the risks, and believe that the benefits will outweigh the costs, we must continue to refine our understanding, expand our knowledge, and find ways to streamline them into our policymaking process. This is so that the perception or the extent of what we know becomes clearer. For instance, growing popularity of internet-of-things—from usage of smartphones to various data-transmitting devices—has created massive amount of individual-level and transaction-level data. These “big data” can help unlock our understanding of the behavioral patterns, perhaps, not even realized by individual data owners. At the Bank of Thailand, we have begun employing big data analysis in macroeconomic, banking sector, and financial market assessments to complement our policymaking process. This has helped ensure that our policy actions are evidence-based and timely. At the same time, necessary steps are taken to validate the integrity and quality of data used as well as to safeguard data privacy. We are just scratching the surface of the potential usage of big data and much more work will be done in this area in the years to come.

Many other “known” areas still require further refinement:  from understanding the impacts of deepening adoption of digital technology on productions, labor markets, inflation dynamics, and hence conduct of monetary policy;  2/4   to the emergence of cryptocurrencies and associated payment technologies that may improve financial inclusion and incorporate ‘smart-contracts’, but may have implications on financial stability, consumer protection and even the environment; and  to the various proof-of-concept initiatives using DLT or Blockchain on wholesale Central Bank Digital Currency (CBDC), where design and technology choices are being explored. Meanwhile, there remain many puzzles and unknowns, where the costs and benefits are unclear and require much more research, study, and debate to identify potential impacts or to assess whether a particular development should be pursued. These include unknowns such as introduction of retail CBDC, which can have implications on the business model of banks and the financial sector and on transmission mechanism of monetary policy. Or, broader issues such as the autonomy of central bank’s policy, which will be challenged by BigTechs and cross-border technologies, as much of central banking has been designed based on a world with national borders. Other unknowns will arise in the future; all of which dictate that we have to be nimble and forward looking. Ultimately, when facing the challenges from the knowns and unknowns, the role of central banks is not only to understand key issues and provide stewardship in the right direction but also to ensure that benefits and costs are well balanced and unintended consequences minimized.