This year on 14th December, Bank of Thailand governor Sethaput Suthiwartnarueput in an interview with the Bangkok Post revealed about discussing a paper on the financial arena which Bank of Thailand (BoT) will release in January. It is defined as “red lines” banning certain activities in the crypto industry including environmentally conscious aspects.

Thailand's government is working on this new regulatory framework on cryptocurrencies to avoid private competition in the payments sector. It is moving toward testing a central bank digital currency (CBDC). “Cryptocurrencies cannot become a means of payment,” Bank of Thailand Governor Sethaput Suthiwartnarueput said in the interview. This may include restrictions on commercial banks that are having “direct involvement” in trading cryptocurrencies. Digital assets are volatile in nature that poses risks to the financial system he added.

Sethaput noted that BoT will issue rules next month promoting innovation including financial aspects. As per him, the new rules are focussing to give adequate safeguards to consumers as “risks are under-appreciated”. The official stated, “We want to ensure that we strike the right balance between allowing financial innovation and managing risks,”

In July also BoT announced “caution” against the usage of cryptocurrency as a mode of payment for goods and services highlighting risks such as cyber-theft, price volatility, and money laundering.

In March a BoT official talked about the plan to regulate stablecoins like Dai, which have an algorithmically controlled currency peg.

All merchants are not supporting BoT positions:

As per the report, in late October, the country’s largest mall developer mentioned testing C-Coin, its own cryptocurrency, among its 80,000 employees to see whether they can use it at stores in shopping centers.

Siam Commercial Bank said in November that it is going to pay more than half a billion dollars for a majority stake in a Thai cryptocurrency exchange, Bitkub. Although in the first quarter of 2022, the deal is excepted to close and waiting for approval from BoT and regulators.

Also Read | SBI Holdings financial services provider company invests in Singapore crypto exchange Coinhako

Indrani bose

CBW - External Analyst

INDIA