Thailand Joins Fleet of Nations Regulating Cryptocurrency Payments

Amid rising concerns over the use of cryptocurrencies, Thailand financial authorities join the list of nations planning to regulate the use of digital assets.

A joint statement by the Bank of Thailand (BOT), the Securities and Exchange Commission (SEC), and the Ministry of Finance (MOF) stated that using cryptocurrencies in payment poses a threat to the country’s financial sector. 

Cryptocurrencies vs Regulatory Bodies

After the news of the cryptocurrency ban in Russia, Thailand joined the list of nations taking action against the unregulated $1.6 trillion market. As reported in a previous article, last Thursday Russia’s central bank proposed banning the use and mining of cryptocurrencies citing threats to financial stability, citizens’ wellbeing, and its monetary policy sovereignty.

Thailand’s plans to regulate the utilization of cryptocurrencies as a form of payment came alongside the recovering cryptocurrency market after the massive weekend losses triggered large-scale sell-offs. 

The Thai regulatory bodies acknowledged the widespread usage of cryptocurrencies as a mode of payment but said that stress needs to be laid on protecting consumers.

Additionally, the regulators stated that they had reviewed the benefits and risks of digital currencies in payment and the risk pertaining to price volatility, cybercrime, data privacy, and money laundering stood out. 

The statement further read:

“Recognizing such risks and implications, regulators will consider exercising power by the relevant legal frameworks to limit the widespread adoption of digital assets as a means of payment for goods and services. Further regulatory guidelines will be issued for certain digital assets that are supportive of the financial system and financial innovation while not posing systemic risks.”

The statement also stated that crypto firms have expanded their business to offer payment services using crypto and the same has solicited payments business by facilitating the acceptance of cryptocurrencies.

The statement went on to say that such efforts may widen the use of crypto as a means of payment, away from its use as an investment, thus impacting financial stability, consumer privacy, and cybercrime.

Larger Market Implications

With the larger market heading for a recovery, market participants were optimistic of a price rebound for large-cap digital assets. Notably, Bitcoin was up 10.11% in the last day and traded at $36,561.32 while Ethereum charted close to a 12% rise in price trading at $2,442.35 at press time. 

Rising crimes have led regulators to come down strongly against cryptocurrencies around the globe. Over the last month, several nations like Russia, Pakistan, and Kosovo have furthered investigations into the use of cryptocurrencies in their respective nations.

While some nations have had hearings on the legal status of digital currencies others are in plans to outrightly ban cryptocurrency trading or impose penalties. Now Thailand could join the growing list of nations that have moved to outlaw digital assets, which already include China, Turkey, Iran, and several other jurisdictions.

The negative narrative around digital currencies and growing regulatory concern could pose a threat to the sector in the long run especially amid conditions of high volatility.