Thailand's central bank warns against using digital currencies for payments

The Bank of Thailand has issued a warning to crypto holders who use their digital assets as a medium of exchange, saying if these practices become widespread it may take strong regulatory measures.

In a Thursday statement, the central bank said anyone who engaged in the trade of digital assets for goods and services, as the sender or recipient, could face risks including money laundering, theft, and price volatility. The Bank of Thailand, or BOT, reiterated its position that cryptocurrencies like Bitcoin (BTC) and Ether (ETH) are not legal tender in the country and warned of consequences from regulators:

“Should the use of digital assets as a means of payment for goods and services become widespread, the BOT will coordinate with the Securities and Exchange Commission and other related agencies to take the necessary measures to ensure that they do not pose extensive risks to the general public or the economic and financial system.”

The BOT added that it was still in the process of developing a central bank digital currency, or CBDC, as well as establishing guidelines for fiat-backed stablecoins in the country. A proposed roadmap for the CBDC released in April said preliminary testing protocols were scheduled to begin in the second quarter of 2022.

With the exception of CBDCs and certain stablecoins, regulators in Thailand have issued a number of guidelines for individual crypto traders and businesses.

Earlier this year, the country’s Securities and Exchange Commission proposed a 1 million baht — roughly $32,000 — minimum annual income requirement for crypto investment in Thailand, a plan it was forced to walk back after public backlash. Last month, SEC officials issued a notice that Thai exchanges were banned from handling meme-based tokens, fan-based tokens, nonfungible tokens, and exchange-issued tokens.

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Meanwhile, crypto trading volume on the country’s exchanges has seemingly continued to rise. Data from the Thai SEC released in April suggested that total trading volume on exchanges increased roughly 600% from November to February, likely putting it at more than $4 billion at the time of publication if the upward trend continued.