Thailand’s Securities and Exchange Commission said Wednesday that it has banned the use of cryptocurrencies as a payment method, citing the need to protect its economy and financial system’s stability as some of the reasons for the ban.
Thailand Declares Crypto Payments Illegal
According to the Wednesday statement, it will no longer be legal to use cryptocurrencies like bitcoin and Ethereum to pay for goods and services starting from April 1, 2022, owing to their high volatility and exorbitant transaction fees.
The move is in line with previous discussions between the Thai SEC and the Bank of Thailand (BoT). The pair assessed the perks and risks of cryptocurrencies and concluded that the sector needed some regulation.
Crypto exchanges and other crypto-related business operators must halt all advertisements encouraging crypto payments by the end of April. They must also caution customers against the use of cryptocurrencies for the same.
The SEC explained in the statement that the prohibition of crypto payments is imperative because they pose a risk to the country’s economy and financial stability. The use of a currency other than the Thai Baht undermines monetary transmission policy. Moreover, pricing goods in crypto will hinder the BoT from stepping in and providing financial assistance in case of a liquidity crisis in the nation.
There are also concerns about digital assets being used for money laundering or as a tool for funding terrorism.
The Silver Lining
Today’s announcement is notably a big blow to crypto investors in Thailand. Thailand is currently one of the world’s leading countries to embrace cryptocurrencies in recent years. A March 4th report notes that Thailand is seventh-ranked globally based on on-chain value received.
Nonetheless, there’s a bright side to the SEC’s latest proclamation. While Thai regulators clamp down on crypto, the SEC maintained that both it and the central bank “see the benefits of various technologies behind digital assets such as blockchain and emphasize and support the use of technology to further innovation.”
Most importantly, the ban only applies to crypto payments. This means that users can still hold and trade digital assets at will. Thailand recently eased tax rules for crypto trading until 2023 in a bid to advance the industry.