Bank of Thailand Allows Banks to Open Subsidiaries for Crypto Dealings

The Bank of Thailand (BoT) has recently allowed local banks to set up subsidiaries for dealing with cryptocurrencies, local Thai source Blognone reported August 3.

According to a regulatory announcement published by the BoT on August 1, Thai banks can now issue digital tokens, provide crypto brokerage services, run crypto-related businesses, and invest in cryptocurrencies through subsidiaries.

However, the recent announcement has reaffirmed that all banks and other financial institutions are still banned from direct dealing with cryptocurrencies.

While banks are now allowed to establish crypto-dealing branches, those branches are prohibited from offering crypto-related services to its customers and the public, and can only interact with other businesses that are approved by Thailand’s Securities and Exchange Commission (Thai SEC) and the Office of Insurance Commission (OIC). Blognone writes that the subsidiaries are also prohibited from offering crypto-related services to individuals.

The subsidiaries are allowed to provide investment resources to customers unless they want to invest in digital assets that aim to develop “financial innovation,” or to expand the quality of financial services, in which case they can use the BoT Regulatory Sandbox, Blognone also notes.

Earlier this year, the BoT released a circular that prohibited banking institutions in Thailand from investing and trading in crypto as well as taking part in establishing crypto exchanges, which are reportedly legal to operate in the country with registration. Thailand’s central bank also required banks not to advise individuals on crypto investments or trading, and banned customers from using credit cards for crypto purchases.

In May, the Thai government had issued a regulatory framework that defines cryptocurrencies as “digital assets and digital tokens,” and puts them under regulation of the Thai SEC.

In early June, the BoT revealed that it is considering providing a “new way of conducting interbank settlement” by using a central bank-issued digital currency (CBDC). According to the bank, the adoption of its own cryptocurrency would cut the costs of transactions, as well reduce the transaction and validation time “due to less intermediation process needed compared to the current systems.”

Earlier in July, the Thai government enacted regulations for Initial Coin Offerings (ICO), having become one of the first jurisdictions in the world to allow ICOs to operate in a fully-regulated environment.