According to Reuters, the central bank released a circular Monday that bans banks in Thailand from investing and trading in crypto, as well as participating in and creating exchanges and platforms for crypto trading.The circular applies specifically to banks, not to exchanges or other services, which are still allowed to operate freely in the country.
Banks were also asked not to advise customers on crypto investment or trading, and to ban clients from using credit cards for crypto purchases. Several large banks globally have already instituted a similar ban of credit card purchases of crypto last week, as the crypto markets took a dip to new multi-month record lows.
In explaining their reasoning for the ban on banks’ dealing with crypto, The Bank of Thailand cited concerns over digital currencies being used for illegal activities, such as money laundering or terrorist activities, and noted that cryptocurrencies are not legal tender in the country.
Regulate, not ban
Thai Finance Minister Apisak Tantivorawong had stated on Feb. 7 that the Thai government will not ban crypto trading, but will work on constructing a regulatory framework for digital currencies, the Bangkok Post reported. The Bank of Thailand’s circular can be seen as warning banks away from crypto until this regulatory framework can be implemented.
In September, 2017, Thailand’s Securities and Exchange Commission (SEC Thailand) had also announced a willingness to support Initial Coin Offerings (ICO) by implementing regulations that would protect investors against fraud. Yesterday, Feb.12, SEC secretary-general Rapee Sucharitakul said the SEC does not have the ability to block crypto transactions as they are traded through online platforms, but will attempt to educate investors to protect them from ICO scams, the Bangkok Post reported.
Thailand’s Ministry of Finance had said Feb. 2 that the Bank of Thailand and the SEC Thailand should warn customers about investing in crypto markets, but that Blockchain technology could be useful for Thailand’s financial sector.
The central Bank of Thailand had previously held a meeting with Ethereum (ETH) co-founder Vitalik Buterin in August 2017 about the future possibility of integrating Ethereum into the Thai financial sector to improve the efficiency of already existing infrastructure.