Ending weeks of speculation, the Bank of Thailand (BOT) and the Securities and Exchange Commission (SEC) on March 24 put in place new regulations governing the digital assets business, effectively curbing their ambitious outreach.
The authorities made it clear that the move was aimed at protecting investors and guarding against financial stability.
The crux of the measure was prohibiting the use of digital assets, such as cryptocurrency and tokens, as a means of payment. Those involved in the digital asset business, whether they are digital exchanges, brokers, dealers, investment advisers, ICO portals or fund managers are barred from creating infrastructure that could facilitate the use of cryptocurrency as a means of payment for goods and services.
They are prohibited from arranging e-wallets that could serve as a payment tool. The law goes into effect from April 1. Players in the field are barred from advertising about services of digital assets to pay for goods and services. The central bank has also imposed a limit on banks’ investment in digital assets; investment by a bank cannot exceed 3 percent of its capital.
The additional rules come as regulators are increasingly concerned about the rising investment in digital assets considered to be unsound or even harmful to retail young investors who do not understand the associated risks.
“Enthusiasm for digital assets in Thai society is high, actually we could say that it is very high,” said Roong Malikamas, BOT’s assistant governor.
She referred to the spike in investors opening accounts to trade in digital assets. From 2020 to 2021, the number of trading accounts went up more than three times, from 700,000 to 2.27 million. The number of cryptocurrency holders in Thailand tops the world list.
The ratio of cryptocurrency holders to internet users is as high as 20.1 percent, double the world average of 10.2 percent. The number of businesses engaging in this new industry is also rising. Thailand has eight digital asset exchanges and seven ICO Portals. In addition, more and more commercial banks and other types of financial institutions have expressed their intention to invest in digital assets, Roong noted.
Sourse : Thai PBS WORLD
April 18, 2022
