their status as a credible and efficient financial intermediary and able to meet private sector demands. these efforts included encouraging financial institutions to rationalize their transaction fees structure, introducing digital cheque - imaging system, and relaxing certain measures related to financial institutions to alleviate financial burdens of flood - affected victims. economic conditions and challenges for 2012 the path towards the future is not a smooth one. ongoing challenges from the past and new challenges will increase obstacles for the thai economy. domestic issues still remain an important hurdle while emerging external issues have created new challenges. these challenges are inherent parts of the mega trends, which include the crisis facing western economies and advancing regional economic integration. currently, thailand appears to be at a transitional gateway of these mega - trends, where the future looks blurry. the persistent economic slowdown plaguing the advanced economies of bis central bankers ’ speeches united states and europe leading up to sovereign debt crisis and continued financial system stresses do not yet have a clear resolution in place. many observers, however, view that after this transitional gateway, asia will be under the spotlight with china as the new leader, leading the economic expansion for other countries in the region. despite this optimism, countries in asia cannot afford to relax, sit back, and enjoy the ride, as economic volatility could arise intermittently via trade and financial channels from western economies. the degree of such impact depends on how well each economy is prepared for the potential disruption. another aspect of the transitional gateway is the asean economic community ( aec ) in 2015. this regional integration will bring not only changes in the regional investment and trade landscape, but also changes in people ’ s attitude as an asean citizen where travel and contact will become more frequent. nonetheless, we should not view aec as the final destination, but rather a stepping stone towards enhancing economic resiliency in the region by creating a single asean market and production base. this would help foster value - added characteristics of the thai economy and increase opportunities for our people, businesses, and everything else that will bring about a better standard of living for all. the two mega - trends i have outlined, when combined with the flood crisis at the end of last year, mean that thailand needs to quickly upgrade infrastructure to improve competitiveness. in particular, public investment in effective natural resources management system and improved governance of public administration will serve as an important driving force for sustainable economic growth. evolution of economic activities in line with the changing environment while the immediate obstacles may have changed, the

( a token - based cbdc would imply a better protection of privacy ) 22 or the organization of the central bank. in particular, managing an account - based system with millions of account balances, each potentially changing every day, would require an incredible effort by the central bank. the implementation of a token - based system, instead, would be easier and could be delegated to a private party. in both cases the security and resilience of the cbdc to cyber - attacks must be assured, in order to preserve trust in the currency. digital hacking of the currency can reap very large rewards, in all likelihood larger than counterfeiting banknotes – the recent attack on the central bank of bangladesh comes to mind. 23 undoubtedly hackers everywhere are dreaming about how to violate the digital currency system! the number of questions related to cbdcs is enormous and the public debate about them is only in its infancy. i cannot address all the issues today. but i do wish to emphasize one last point before concluding my remarks. if central banks decided to make an asset – the cbdc – free of credit and liquidity risk, possibly remunerated, and available to anybody at no cost, their role in the economy would fundamentally change. the size of their balance sheets would likely increase, and with it their footprint in the economy. if the cbdc were account - based, central banks would start to interact directly with the private non - financial sector. are central banks ready to play this new role and to deal with the attendant complexities? in the short term my answer is no. beyond the short term, greater investment in new technologies and human capital would be necessary to address the challenges associated with issuing a cbdc. see for example mersch, y. “ digital base money : an assessment from the ecb ’ s perspective ”, speech at suomen pankki, january 2017. for instance, a malware installed on the bangladesh central bank ’ s computer successfully diverted around $ 80 million from its accounts. 5. conclusions the technological revolution is pushing us towards a digital representation of many objects in our daily lives. banknotes might be next in line. however, there are still many uncertainties on that front. some of them are economic in nature, such as the efficiency of the payment system and financial stability. others are related to individual rights, such as the right to privacy. society as a whole would do well to decide on how to tackle the latter before the central