Key highlights:
- Thailand will ban cryptos as a payment method.
- In the past, Thailand has had many ups and downs regarding cryptos.
- The Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) made a decision about the banning and expressed their concerns in regard to cryptos.
Thailand Securities and Exchange Commission (SEC) has issued a directive banning the use of digital assets to pay for services and goods as of April 1st.
There have been many ups and downs between Thailand and crypto going on for quite some time. Last year, after meme tokens became popular, Thailand’s SEC prohibited exchanges from listing meme tokens. The agency said they have no clear objective or substance and that their price depends on social media trends. They also prohibited exchanges from listing “fan tokens”. Those rules also applied to non-fungible tokens (NFTs), another crypto asset that gained popularity last year along with meme tokens.
Thailand recently enacted a 15% tax on cryptocurrency gains. Within a month, they announced that payment methods utilizing cryptos would be regulated. Just a month later, the tax was removed.
After everything had seemed to be going well, things went downhill again. Wednesday the SEC announced that crypto would be banned as a payment method as of April 1st. There is, however, still time for local businesses to comply with the new regulations before the end of April.
The decision was made by both the SEC and the Bank of Thailand (BOT)
According to the announcement, this decision was made after many discussions between the SEC and the BOT. Financial stability was the same concern for both institutions due to volatility and the risk of cyber-attacks and money laundering.
Both institutions discussed digital assets’ benefits and risks. As a resource for trading goods and services, they think digital assets should be regulated and controlled because their use may affect financial stability and economic growth. They are concerned that cryptocurrencies may pose risks to individuals and businesses, such as those connected with price volatility, cyber-theft, personal data leakage, or being used to launder money.
The announcement also specifically mentioned cryptocurrencies could still be used for investment purposes despite this ban. There was also a second briefing that occurred later on the BOC’s guidelines for banks with digital asset businesses.
Similar bans have been issued by other members of the Association of Southeast Asian Nations (ASEAN) in the past years. Central banks do not directly support cryptocurrencies (apart from El Salvador), even in nations where Bitcoin is broadly used.
Regarding Nares Laopannarai, secretary-general of the Thai Digital Asset Association, major corporations, especially those who made substantial investments in crypto mining — notably at a time when Bitcoin’s price fell — have been put under the gun by the BOT’s latest declaration.
Terdsak Thaweethiratham, an analyst at Asia Plus Securities, clarified that BOT’s action cannot be avoided since it is the central bank’s responsibility to regulate in order to reduce risk and safeguard the country’s financial stability. Nevertheless, the impending financial technology upheaval, including the usage of blockchain and Bitcoin, cannot be ignored. In the end, he added that hopingly all regulations will be flexible and fair to all.
