Thailand bans cryptocurrency payments

Thai SEC outlines concern that cryptocurrencies could damage stability of the financial system

Thailand’s Security and Exchange Commission (SEC) announced on Wednesday that it will ban the use of cryptocurrency as a means of payment from the start of next month. 

SEC

The regulator outlined its concern that digital assets “may affect the stability of the financial system and the overall economy, including risks to people and businesses such as the risk of loss of value cause by price volatility, the risk of cyber theft, the risk of personal data leaks or their use as a tool of money laundering.” 

The new rules will prohibit companies in Thailand from providing cryptocurrency payment services or acting in a manner that encourages or promotes the payment of goods and services with digital assets. 

This will include bans on businesses advertising, soliciting or presenting themselves to merchants as available to pay for goods and services with cryptocurrencies. They will also be banned from establishing systems, tools and wallets to facilitate crypto payments. 

Thai businesses will have until the end of April to come into full compliance with the new regulations. 

It warned that companies who are not in compliance after this date will be subject to legal action, including the temporary suspension and cancellation of services.

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The new rules further demonstrate the difference of opinion held by national governments and regulators towards the burgeoning sector. 

Earlier this week, a deputy government minister in Thailand’s neighbouring country, Malaysia proposed the adoption of cryptocurrencies as legal tender. 

Regulation

Although their use for payments will be banned, cryptocurrency and digital asset trading will still be allowed in Thailand.

Indeed, the SEC stressed that it, in conjunction with the Bank of Thailand (BOT) and a number of other agencies, recognises “the benefits of technologies behind digital assets such as blockchain and value and support the use of technology to further innovation.”

Earlier this month, the Thai Finance Ministry announced that it would exempt cryptocurrency traders from a 7% value-added tax for those using authorised exchanges in order to boost the country’s domestic digital asset sector.

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