Yesterday, 3rd August 2018, The Bank of Thailand (BoT) released a statement that allows Thai’s commercial banks to invest in cryptocurrencies. As by the announcement, the commercial banks will be permitted to buy and sell digital assets as long as they operate under the permission of the country’s Securities and Exchange Commission (SEC).
Thailand Cryptocurrency Regulatory Framework
On the 3rd of May this year, Thailand joined the long list of countries that have a regulatory framework for digital currencies. This announcement came after a prolonged study of an appropriate measure for the regulation of cryptocurrencies in Thailand.
In essence, the journey to finding a regulatory framework for digital currencies in Thailand had begun over a year ago. In February 2017, Veerathai Santiprabhob, the governor of the Central Bank of Thailand had asked all banks of Thailand to halt all transactions that involved cryptocurrencies. Veerathai’s step was taken as a precautionary measure to create an avenue for the country to develop a viable regulation for trading in digital assets within Thailand.
During the introduction of the debate to adopt cryptocurrencies in Thailand, most of the preservative lawmakers of the nation were against the adoption of the currency. The anonymity and instability nature of digital currencies had delayed the development of a reasonable framework over a lengthy period.
According to Thai’s Deputy Prime Minister, Wissanu Krea-ngam, most lawmakers dreaded that the adoption of digital currencies could aid money laundering and other crimes tax evasion within the country. TSEC had also feared the risk of collapsing Thai’s economy should the commercial banks engage in cryptocurrencies as they were viewed to be unstable.
Even so, because of the popularity of the currencies, Wissanu had added that the general view of the lawmakers was to develop a framework that could regulate cryptocurrencies and ICOs as opposed to banning them (as most people dreaded then).
On May Thailand’s Royal Gazette published a regulation that classified cryptocurrencies as digital assets that were to be regulated by TSEC. This act made TSEC the sole legal regulator of digital assets in Thailand
10 Days To Regulation Compliance Deadline
According to the royal decree, all sellers of digital assets in Thai were required to register with TSEC before 14th August 2018. This decree gives financial institutions within Thailand just ten more days to comply. A failure to do this would make an institution to incur a penalty worth double the value of the unauthorized transaction. An institution could also suffer a fine of over 500,000 baht (approximately $15,700) or a two-year jail term.
At the passing of the May digital asset regulation, financial institutions were not very aware of any other compliance details besides registration to TSEC. This uncertainty had slowed down the adoption of cryptocurrencies.
Also, at the inception of the decree, digital currencies were not considered by Thailand as a legal medium of exchange. With time, however, this has slightly changed. Currently, Thai banks are permitted to issue digital tokens, offer brokerage for digital currency services, engage in businesses with digital assets and invest in digital assets with the help of subsidiaries.
Thailand is one of the nations that have strived over an extended period to regulate digital currencies. An article published by Blogone, a Thai newsgroup, indicated that the announcement by the Thai Securities and Exchange Commission (TSEC) still prohibited commercial banks from directly engaging in transactions that involved cryptocurrencies.
This pronouncement affirms the country’s reluctance to adopt cryptocurrencies fully. Even so, the new announcement that allows banks to buy and sell digital currencies; is by and large a major step towards the adoption of crypto within Thailand.