While some countries make progress legalizing the use of cryptocurrencies, others decide to go the opposite way, banning some uses of crypto technology. This is the case of Thailand, which recently announced that it will ban payments with cryptocurrencies.
The decision is made by the Securities and Exchange Commission of Thailand and the Bank of Thailand (BOT) and was disclosed in a statement published last Wednesday (22).
According to the publication, it will be illegal to pay for goods and services with cryptocurrencies from April 1st in the Southeast Asian country.
Cryptocurrencies as a Prohibited Payment Method
Also according to the statement, the decision was taken because digital assets could allegedly affect the stability of the financial system and the economy in general, including risks to people and businesses due to price volatility.
The text also cites risks of cyber theft, data leakage or use of digital currencies for money laundering.
“The CVM therefore considered exercising its powers in accordance with the relevant legal framework. Supervise the services of business operators not to use digital assets as a means of payment for goods and services.
Companies operating with cryptocurrencies in the country must also not “provide services or act in a way that encourages or promotes the payment of goods and services with digital assets”.
The statement highlights that actions such as advertising are prohibited; presentation of availability to pay for goods or services to merchants; establishment of a tool to facilitate payment; opening cryptocurrency wallets for the purpose of using them as a means of payment, etc.
In addition, it will be up to crypto operators to notify the authorities about the “misuse” of cryptocurrencies by users. In addition, they must take measures for customers who do not comply with the terms, including temporary suspension or termination of the service.
Although the rules will take effect from April 1, business operators have until the end of April to comply with the rules.
Thailand will not ban crypto investment
In a question-and-answer session set out in the statement, the bodies said the issue of concern is the risks associated with the widespread use of digital assets to pay for goods and services.
That’s because, according to the regulars, “the current payment system in Thailand is already highly efficient.” Thus, they claim that the use of crypto-assets for this purpose “does not add much benefit to people and companies”.
“However, the BOT and CVM, as well as other government agencies, see the benefits of various technologies behind digital assets, such as blockchain, and emphasize and support the use of technology to promote innovation and do not block the use of digital assets. digital assets for investment”, he emphasizes.
Thailand moves forward with CBDC
It is worth noting that Thailand is making progress in issuing a central bank digital currency (CBDC). Its objective, according to the statement, is to create an infrastructure for more financial innovation.
At the same time, the country plans to promote the development of new financial services. This includes selling capitalization bonds via blockchain and issuing electronic guarantees using the technology.
Last year, the Thai regulator was one of many to put pressure on Binance. More precisely, the body has filed a criminal complaint against the exchange for unregistered transactions.
According to Thailand’s CVM, Binance operated a cryptocurrency business in the country without proper license.
In response, Binance limited itself to saying that it takes a collaborative approach to working with regulators. The exchange further said that it takes its compliance obligations seriously.