Thailand Outlaws Crypto as a Medium of Payment
In the quest to centralize and control the use of cryptocurrency in the country, the Securities and Exchange Commission (SEC) has placed a ban on cryptocurrency as a medium of payments in Thailand, effective from April 2022.
Crypto Banned as Medium of Payment
In the statement shared by the SEC, the commission has proposed a law that mandates full disclosure from all crypto businesses, including exchanges and brokers. Furthermore, businesses have been warned about the implications of accepting crypto as a means of exchange by the Bank of Thailand (BOT).
The commission also warned that businesses that fail to comply with the new crypto regulations would be subject to legal actions, including temporary suspension or cancellation of the services.
Explaining the reasons for the ban, the commission cited money laundering concerns, the inability of Thailand (BOT)’s to provide assistance or regulate the crypto market in the country and other risks from price volatility, data leakage and cyber theft.
They further pointed out various complaints related to system malfunctions and the inability of the crypto services to meet the desired conditions, hinting that this is another strong reason for the drastic measure.
The Thai SEC further Emphasized that digital assets do not offer enough efficiency to the payments market because of their volatility and high transaction fees. The commission, however, clarified that the new law did not prevent people in the region from trading cryptocurrency and other digital assets.
Current State of Things
In a joint study conducted by the commission, they came up with the following:
“[Crypto payments] may affect the stability of the financial system and overall economic system including risks to people and businesses.”
“However, the BOT and the SEC, as well as other government agencies, recognize the benefits of technologies behind digital assets such as blockchain and value and support the use of technology to further innovation.”
“Prepare and deliver [service quality and system capacity utilization reports] to the SEC office on a monthly basis within the 5th day of the following month.”
Other Countries That Have Carried Out a Crackdown on Cryptocurrency
It should recalled that several countries, including China, Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh banned the use of cryptocurrency, either implicitly or absolutely.
When it banned crypto last year, China did so in a series of phases.
First, the country prohibited financial institutions from engaging in crypto transactions in May. Then it banned all domestic crypto mining in June and finally prohibited cryptocurrencies outrightly in September.
The world’s second-largest economy had previously been a centre for mining cryptocurrencies, and the government’s moves against crypto caused major selloffs before prices stabilized.
China’s government said it was especially concerned about crypto mining’s effect on the environment and people using digital currencies for fraud and money laundering. So the country is now pushing the digital yuan currency and trying to make it more widely available to its citizens.
These examples reveal the delicate balance between crypto adoption and rejection globally. It remains to be seen whether the Thai SEC will reverse its ruling in the coming months.
