- Thailand will ban the use of cryptocurrencies as a means of payment for goods and services.
- According to the Bank of Thailand, a ban on crypto payments is necessary to protect the stability of the financial system.
- Despite increasing restrictions from regulators, cryptocurrency adoption in Thailand is flourishing.
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Thailand’s Securities and Exchange Commission has banned the use of digital assets as a means of paying for goods and services. Officials stated the need to protect financial stability and the national economy as reasons for the ban.
Thailand Bans Crypto Payments
Cryptocurrency use has been dealt a significant blow in Thailand.
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The country’s Securities and Exchange Commission and the Bank of Thailand released a joint statement Wednesday issuing new rules on the use of digital assets as a means of payment for goods and services. From Apr. 1, digital assets such as Bitcoin and Ethereum will no longer be legal to use as a payment method.
The statement asserts that business and crypto exchanges in Thailand must not provide digital asset payment services or encourage using them as a means of payment. While using cryptocurrencies to pay for goods and services will be prohibited, holding and trading digital assets remains unaffected. Those in breach of the new rules have until Apr. 30 to comply.
According to the Bank of Thailand and the country’s SEC, a ban on crypto payments is necessary because it may affect the stability of the financial system and the overall economy. The pair state that the emergence of a unit of account or a pricing unit other than Thailand’s official currency, the Thai baht, will reduce the efficiency of monetary policy transmission. Additionally, in the event of a liquidity crisis in the country, the Bank of Thailand would be unable to provide financial assistance in any form except the Thai baht.
The new rules regarding crypto payments follow previous statements made by the Bank of Thailand. The bank warned that it does not support cryptocurrencies as a valid payment method due to “high volatility and the risk of cyber theft.” However, while Thai regulators crackdown on crypto, they also appear to recognize the benefits of blockchain technologies. The Bank of Thailand plans to launch a pilot for a retail central bank digital currency by the end of 2022 with the aim of reducing financial costs.
Despite increasing restrictions from regulators, cryptocurrency adoption in Thailand is flourishing. According to a report published by Statista Mar. 4, Thailand ranks seventh globally in terms of on-chain value received as a cryptocurrency adoption metric. The country has also attracted institutional investment in the crypto sector, with Thai billionaire Sarath Ratanavadi partnering with Binance to set up a local crypto exchange.
Disclosure: At the time of writing this piece, the author owned ETH and several other cryptocurrencies.
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