Banking News

Thailand restricts use of digital assets for payments

Yesterday Thailand said it plans to strictly regulate the use of digital assets or cryptocurrencies for payments for goods and services. The three main regulators, the Bank of Thailand, the Securities and Exchange Commission (SEC) and the Ministry of Finance (MoF), issued a joint statement.

Some digital asset businesses have tried to sell digital currency payment solutions to local businesses. The regulators are concerned about the impact on financial stability and money laundering, as well as additional risks to consumers from cybertheft and leaking personal data through payments.

The aim is only to allow regulated digital assets to be used for payments. Sethaput Suthiwartnarueput, Governor of the BOT, highlighted the risks of widespread use of digital currencies for payments. But he also noted that “digital assets that do not pose such risks should be supported with appropriate regulatory frameworks to drive innovation and further benefit for the public.” Meanwhile, the central bank is developing a prototype central bank digital currency.

There are plans to issue regulatory frameworks taking public feedback into account.

Thailand is clamping down on international payments more broadly. It was recently misreported that PayPal is closing down in Thailand. In reality, all Thai PayPal account holders have to go through new identity checks. However, PayPal accounts will effectively be non-functional for consumer users for a significant period. Paypal said that the payment “capabilities will evolve as the gradual relaunch of our services continues into 2022.”

In June 2021, the Thai SEC issued rules banning cryptocurrency exchanges from operating NFT marketplaces or participating in fan tokens. However, in October, KASIKORN X, a subsidiary of Thailand’s biggest bank, launched an NFT marketplace. Siam Commercial Bank is also very active in the digital assets sector. In November, it paid $537 million for a 51% interest in crypto exchange Bitkub, which is SEC regulated.