The Bank of Thailand is growing increasingly wary of digital assets and plans to introduce new measures to curb activities for individuals and businesses alike in the name of consumer protection.
Thailand’s central bank will release a consultation paper on the “Financial Landscape” in January 2022. The report will seek a consensus for what it calls “red lines” for crypto operators and businesses.
BoT Governor Sethaput Suthiwartnarueput specifically stated that cryptocurrencies as payment channels are one of those red lines and will not be tolerated.
According to a Dec 14 Bangkok Post report, the new regulations aim to minimize risks to the financial system and provide greater investor protection.
The central bank is aiming to begin testing its own CDBC next year, so it is possible that Thailand will follow China in pushing crypto aside in favor of its own state-controlled currency.
Curtailing crypto in Thailand
The Bank of Thailand has repeatedly issued warnings about cryptocurrencies and cautioned commercial banks against direct involvement in digital assets.
Last week, a central bank senior director cited risks associated with high price volatility and stated, “We don’t want banks to be directly involved in digital asset trading because banks are (responsible) for customer deposits and the public and there is a risk.”
Another BoT senior director warned companies on accepting crypto payments stating that if “other currencies” were widely used, “it will impact the central bank’s ability oversee the economy.”
The central bank crackdowns come at a time when a number of Thailand’s leading commercial banks have expressed interest and have invested in digital asset platforms.
In early November, Thailand’s oldest and first commercial bank, Siam Commercial Bank, purchased a majority stake in the leading Thai crypto exchange Bitkub.
According to the Thai Securities and Exchange Commission, trading volume has surged more than 1,100% over the past 12 months to $6.6 billion in November.
Tourism ministry wants the opposite
While the central bank aims to crack down on crypto, Thailand’s tourism ministry wants the complete opposite. It is trying to tout the country as crypto-friendly in order to attract Bitcoin whales, high rollers, and digital nomads to revive its battered tourist industry.
The Tourism Authority of Thailand aims to launch its own TAT Coin but if the BoT gets its way, there will be nowhere to use it. Last month, TAT Governor Yuthasak Supasorn said “Crypto is the future, so we must make Thailand a crypto-positive society to welcome this group of quality tourists,” but the central bankers clearly disagree.
Thailand’s military-backed government has tried to revive the decimated tourism industry with a November “soft opening,” but the Kingdom remains largely locked down with restrictions still in place at the time of press.