Bank of Thailand will Draw ‘Red Lines’ on Crypto

Even though the rate of crypto adoption has surged globally, there is still a lack of clarity when it comes to regulation in a number of countries. There are a limited number of jurisdictions that have taken a progressive and clear approach in developing their crypto regulatory frameworks. There are also some countries that are still working on regulation and Thailand appears to be one of them. The country plans to unveil comprehensive and clear legislation that would be applicable to digital assets in the next year. New rules would be introduced by the Bank of Thailand in January 2022 that would be applicable to cryptocurrencies and would reduce the risk associated with these crypto-assets for protecting investors and the financial system. 

Sethaput Suthiwartnarueput, the governor of the central bank of Thailand, had said in an interview that they would issue a consultation paper in January 2022 that would be titled ‘Financial Landscape’. He said that the aim of the paper would be to provide clarification on how people in the country would interact with bitcoin and other cryptocurrencies. He added that the purpose of the rules was to give protection to investors who are dealing with crypto assets because of the high risks that are associated with these digital currencies. 

Three agencies will be part of this initiative and these include the Thailand Securities and Exchange Commission, the Bank of Thailand and the Finance Ministry. They will work together for ensuring that cryptocurrencies do not become a method of payment in Thailand. The governor also issued a warning to investors about the volatility of cryptocurrencies. Local banks have been urged by the Bank of Thailand to not use cryptocurrencies because of their volatile nature. According to the institution, their ability to monitor the economy could be affected by the increased use of altcoins and Bitcoins.

Even though the Bank of Thailand has expressed negative sentiment about cryptocurrencies, the country still has a high level of crypto trading activity. Jirayut Srupsrisopa, the CEO of Bitkub, recently urged lawmakers to adopt cryptocurrencies because they can help give the GDP of the country a boost. The CEO said that the private sector was ready to provide the digital infrastructure that would be required for promoting the use of crypto to the tourism industry. He said that Thailand’s GDP could increase by six times, if the country was to embrace crypto. 

Almost 20% of the country’s GDP is generated via tourism and the Toursim Authority of Thailand (TAT) has already announced its plans of launching a utility token in September that has been dubbed TAT coin. The purpose of the coin is to attract the attention of rich crypto tourists and discussions between the country’s SEC and the tourism authority about issuance are ongoing. Thailand is also planning on beginning the testing phase for their central bank digital currency (CBDC) next year. The aim of the CBDC is to ensure financial inclusion without affecting the financial stability of the country. It will also give efficiency in the financial sector a boost and reduce cost of cross-border transactions.