Thailand has issued new rules barring the use of digital assets for payments, its securities regulator has said. The rule takes effect on April 1.
The development comes after the Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) raised concerns around financial stability and money laundering in the country.
“Since most digital assets are developed from a public decentralized technology (public blockchain), there are no regulators and no security standards have been set,” the regulator added.
The SEC also cites price volatility, cyber theft, and risk to personal data as other reasons for the decision. Digital asset business operators are required to comply with the rules within 30 days from April 1.
The rule also bars crypto operators from advertising the use of cryptocurrencies as a means of payment.
The central bank has continued to raise concerns about the effect of cryptocurrencies on monetary policy, which has discouraged commercial banks from offering crypto-related services.
“This [crypto payments] will also reduce the BOT’s ability to maintain financial conditions in accordance with the economic conditions in each period,” the SEC added.
However, the agency continues to state that the country supports innovation in the sector. Last month, Thailand scrapped plans to levy a 15% capital gains tax on crypto following a public outcry.
Thailand’s crypto adoption has exploded in last 18 months
Crypto has become very popular in the country over the past 18 months, particularly among its youth. And lawmakers had already banned meme coins and non-fungible tokens (NFTs).
The SEC also points out that its decision is in line with the regulations of the UK, EU, South Korea, and Malaysia.
An estimated 5.2% of the Thai population, or 3.6 million, own crypto. The country was one of the first countries in Southeast Asia to bring in legislation to oversee the sector.
Governments are holding taxation, investor, and anti-money laundering as their top priorities in their cryptocurrency regulation agenda. The asset class has grown considerably in terms of adoption in the past two years, thanks to DeFi and NFTs.
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