Proposed Regulation to Prohibit Crypto Payments
According to Bloomberg on Tuesday (Dec. 14, 2021), BoT Governor Sethaput Suthiwartnarueput during an interview said that the central bank will issue a consultation paper on “Financial Landscape” by January 2022. The consultation paper is seeking a consensus for what the BoT referred to as “red-lines” for cryptocurrency businesses operating in the country.
Sethaput added that the central bank is working with the country’s Securities and Exchange Commission (SEC), along with the Ministry of Finance, to determine what the so-called “red-lines” will be. The BoT said that the use of crypto for payment of goods and services was an example of such a red-line that would not be accepted.
A statement from the BOT governor said:
“We want to ensure that we strike the right balance between allowing financial innovation and managing risks. The new rules will provide adequate safeguards for consumers as risks are under-appreciated.”
Meanwhile, the Thailand government is moving to establish crypto regulations amid the increasing interest in cryptocurrency globally. More individuals are looking to grow their wealth while seeking a safe haven from economic turmoil.
The BOT has issued several warnings about the cryptocurrency industry. Interestingly, the refusal to allow crypto payments also echoes a similar warning given back in July.
At the time, the Thailand central bank said that businesses in the country were already accepting bitcoin and other cryptos for payment, but warned that such payment method was risky, both to the payer and the recipient. Earlier in 2021, the Thai SEC announced a proposal to limit crypto investment to individuals who hold a minimum of one million baht (~$30,000).
In December, a top official of the central bank, Chayawadee Chai-anant, said that commercial banks in Thailand should avoid getting involved in cryptocurrency trading. According to the BOT, such activity came with volatility and risks that were harmful to the financial system. Meanwhile, Sam Commercial Bank (SCB), Thailand’s oldest bank, in November, acquired a 51% stake in local crypto exchange Bitkub.
BOT to Trial Retail CBDC in 2022
While the BOT is preparing to release its crypto guidelines, the country’s tourism agency, the Tourism Authority of Thailand (TAT) is looking to attract large crypto holders and digital normals to the country, a move that could help revive the tourism sector.
Back in September, the agency said that it was planning to launch a utility token called TAT ‘coin’, However, the Ministry would need the approval of the SEC, but it is yet unknown if the incoming digital assets regulation would affect the issuance or the TAT token.
The central bank is, meanwhile, working on testing a retail central bank digital currency (CBDC) in 2022. Sethaput noted that a digital version of the country’s fiat currency would ensure financial inclusion without endangering the stability of the financial system.