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Thailand becomes the latest country to crack down on crypto usage, with its financial authorities planning to prohibit the use of crypto-assets to pay for goods and services.
According to a joint statement issued by the Bank of Thailand (BOT), the Securities and Exchange Commission (SEC) and the Ministry of Finance, following a review of the benefits and risks of digital assets, plans are now being prepared to regulate their usage as a means of payment for goods and services.
“At present, widespread adoption of digital assets as a means of payment for goods and services poses risk to the country's economic and financial system,” said BOT governor Sethaput Suthiwartnarueput.
Therefore, clear supervision of such activity is needed, he stressed. “However, technologies and digital assets that do not pose such risks should be supported with appropriate regulatory frameworks to drive innovation and further benefit for the public.”
Operators have expanded their business to cover services related to the use of digital assets as a means of payment for goods and services in the country, the regulators said in a press release.
This has included some who have made a success out of offering to facilitate merchants and businesses in accepting digital assets as payment for goods and services, such as by setting up digital asset settlement systems.
Thai authorities are concerned that widening the adoption of digital assets for use as a means of payment, aside from its usage as investment, could have a destabilising impact on the financial system. It could also trigger risks to consumers and businesses through price volatility, cyber theft, personal data leakage or money laundering.
In recognising such risks and implications, the regulators have confirmed that they will consider exercising power in accordance with the relevant legal frameworks to limit the widespread adoption of digital assets as a means of payment for goods and services.
Whether, as some news reports have suggested, this means a total ban, remains to be seen.
Further regulatory guidelines will be issued for certain digital assets that are supportive of the financial system and financial innovation, while not posing what the regulators feel are systemic risks.
Feedback from relevant stakeholders and the general public will be taken into consideration to determine the appropriate regulatory frameworks, with the deadline for submission being February 8.
The Thai regulators have already been tough on crypto use in the country. Last summer, the SEC cracked down on non-fungible tokens (NFTs) and so-called meme coins, like the Dogecoin, whose price was largely inflated due to an endorsement from Elon Musk.
According to the SEC, these new rules were aimed at protecting traders from tokens that have no clear objective or substance, and whose prices are at risk of being swayed by social media trends and influencers.
