On Wednesday, the Securities and Exchange Commission (SEC) of Thailand declared that it is limiting the use of cryptocurrencies as a means of payment of goods and services as of April 1 citing a number of financial and economic threats.

The newly adopted regulations will take impact on April 1, 2022, the SEC said. The agency introduced that digital asset commercial enterprise operators, consisting of crypto exchanges, would have 30 days to comply with the new regulations from the effective date.

Companies must now not enforce structures and tools to facilitate crypto payments or open wallets for that purpose, the commission said. If a crypto platform establishes that its customers use buying and selling accounts for payments, it needs to notify the customers about the misuse and take similar action, if necessary, inclusive of temporary suspension or termination of services. The law additionally bans the promoting of cryptocurrencies for fees alongside the distribution of software and devices for that purpose. It says as well that operators of digital asset organizations need to warn their customers of the ban and can suspend their accounts if they violate the regulation. In addition to now not providing the services, organizations are additionally barred from encouraging or promoting the use of the digital property to pay for goods or services. Businesses have till the end of April to comply with the ban.

The country’s securities regulator introduced regulations designed to discourage digital asset operators from presenting and encouraging such services. The move follows in the past discussions between the Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) on the advantages and risks of digital assets during which the two establishments recognized the want to undertake rules keeping the steadiness of the nation’s financial system and economy and preventing risks for its residents and companies.

The agency is putting in place measures to safeguard the nation's financial and monetary systems from threats that include money laundering and other cyber crimes as per the Securities and Exchange Commission. The regulator writes that its decision is based on the inherent dangers related to cryptocurrencies. The risk has been listed are its price volatility, the possibility for hacking, private information exposure, and it being used for money laundering.

The Thai SEC will in the future supervise the companies in the sector intently to make certain they are now not offering a digital property as a payment method. At the same time, the new guidelines are no longer meant to block crypto buying and selling, and investing.

The SEC and the BOT disclosed their plan to regulate crypto payments in January. The regulatory update comes in spite of preceding tries to facilitate such payments in Thailand, a famous traveller destination. For example, the tourism enterprise lately held talks with the central financial institution to find alternative payment methods, including crypto, for Russian visitors whose country has been placed under sanctions over its invasion of Ukraine.

Indrani bose

CBW - External Analyst

INDIA