Thailand Prohibits Use Of Crypto For Payments

Thai SEC Issues Crypto Payment Ban

In an official press release, Thailand’s Securities and Exchange Commission (SEC) issued new rules that would ban the use of cryptocurrency as a payment method in Thailand, following similar steps already implemented by Turkey and Indonesia.

According to the regulator, the need to control and regulate the use of digital assets came after a discussion between the Thai SEC and the Bank of Thailand (BOT), the country’s central bank.

According to the Thai SEC, digital asset operators in Thailand are prohibited from providing services that encourage the payment of goods and services with cryptocurrency.

These firms are also prohibited from advertising, soliciting, or portraying themselves as offering services that allow crypto as a medium of payment, nor should they establish a system that facilitates such services.

Furthermore, operators must warn customers against utilizing cryptocurrency for payments and may either temporarily halt or terminate accounts found to be breaching the new rules.

The Thai SEC said that the use of digital assets as a means of payment could adversely affect Thailand’s economic and financial stability.

Also, the securities regulator noted that cryptocurrency, due to its anonymous nature, can be used for money-laundering, terrorist financing, and many other illicit activities. The BOT earlier warned about the risks of adopting crypto for payments.

However, the new rules do not apply to cryptocurrency trading and investment. An excerpt from the press release said:

“This criterion directs that digital asset operators are prohibited from providing services. This applies only to activities related to the adoption of digital assets as a medium of payment for goods and services; therefore digital asset traders/investors can carry out normal investment/trading related transactions. Licensed digital asset operators are able to conduct business and provide services as usual.”

The Thai SEC said the ban will take effect as of April 1, 2022, while crypto businesses have until the end of April to comply with the new rules.

Crypto Traders Exempt from Thailand’s 7% VAT

Thailand’s restriction on the use of digital assets comes amid increased cryptocurrency trading activity, especially among young investors in the country.

According to Bloomberg, the value of crypto held by Thai investors rose to 114.5 billion baht ($3.4 billion) in January 2022, from 9.6 billion baht ($285.3 million) a few years ago.

Earlier in January, there were reports that Thai taxpayers trading crypto would be subject to a 15% capital gains tax, with the exemption of cryptocurrency exchanges.

However, the tax policy was met with criticisms, with some stakeholders stating that such a rule could kill the crypto industry in Thailand. Subsequently, Thai authorities later scrapped the proposed tax on cryptocurrency gains.

Earlier in March, the government presented more relaxed tax rules on crypto trading. Part of the new tax policy will exempt traders from the seven percent value-added tax (VAT) for cryptocurrency trading on authorized crypto exchanges.

Also, traders will be able to “deduct losses from the sale of digital assets on the exchange from the profits from the sale of digital assets on the exchange.”

The new tax rules will take effect as of April 1, 2022, and last until December 2023.

While Thailand has not fully embraced cryptocurrency, they have not rejected it outright. For now, investors and traders can continue business as usual.

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