Bank of Thailand to unveil detailed crypto rules in 2022
The rules will be published in January next year as part of a consultation paper
The Bank of Thailand (BoT) is planning to unveil a detailed set of rules for cryptos in order to minimise risks to the financial system and offer greater investor protection.
The rules will be published in January 2022 in a “Financial Landscape” consultation paper, which will set out the “red lines” for those who deal with cryptos.
Speaking in interview, BoT governor Sethaput Suthiwartnarueput told the Bangkok Post that the rules will aim to promote innovation in technology, financial inclusion and manage systemic risks.
The central bank is working with the Thailand’s Securities and Exchange Commission and the Finance Ministry to outline the “red lines”, including that “cryptocurrencies cannot become a means of payment”, said Sethaput.
Recent central bank warnings
Last week, the BoT cautioned commercial banks against “direct involvement” in trading in cryptos due to their high volatility.
The warning came as turnover from Thailand’s crypto exchanges has shot up in the past year. From November 2020 to November 2021, the exchanges have reported an increase of THB18bn ($538m, £406m) to THB221bn baht ($6.6bn, £4.9bn) according to data from the nation’s Securities and Exchange Commission.
These figures are drawing interest from other banks in Thailand.
Sethaput said: “We want to ensure that we strike the right balance between allowing financial innovation and managing risks,” Sethaput said, adding that the new rules aim to provide adequate safeguards for consumers because the “risks are underappreciated”.
Central bank digital currency
Thailand is looking into a retail central bank digital currency (CBDC), which is expected to be tested next year. Sethaput has said previously that the CBDC will be more effective in achieving financial inclusion without hindering financial stability.
Sethaput added that Thailand is experimenting with a wholesale CBDC that has already assisted in lowering cross-border transaction costs and increasing efficiency.
The consultation paper will also cover other issues, such as environmental, social and governance (ESG) investments.