The Bank of Thailand (BOT), Securities and Exchange Commission (SEC) and Ministry of Finance (MOF) have jointly decided to regulate the use of cryptocurrencies as a medium of exchange. They cite threats of financial instability and crime as primary justifications.
Strictness On Crypto
BOT announced its regulatory decision in a press release earlier today. It begins by recognizing how digital asset companies are expanding the functionality of cryptocurrencies as a medium of exchange.
Indeed, numerous companies including Google and Mastercard now allow the use of crypto at vendors that don’t accept crypto directly. Meanwhile, companies like OpenNode are building out Bitcoin payment networks via the lightning network for organizations such as Perth Heat.
Thai regulators interpret these developments as moving cryptocurrencies from “investments” to “means of exchange”. They fear that this could cause financial instability.
“The use of digital assets in this manner could also pose further risks to consumers and businesses through price volatility, cybertheft, personal data leakage, or money laundering, etc.” read the post.
Cryptocurrencies are indeed volatile, with Bitcoin now trading almost 50% below its all-time high under three months ago. However, money laundering and cyber theft are commonly overstated issues. A Chainalysis report from 2020 states that cryptocurrency crime is “falling,” and represents “a small part of the overall crypto economy.”
Nevertheless, regulators intend to limit the “widespread adoption” of cryptocurrencies as a means of payment. However, some assets deemed “supportive” of the financial system will see regulatory guidelines issued for them. This could possibly include a CBDC, for which BOT is planning a pilot project.
Taxes in Thailand
Earlier this month, CryptoPotato reported Thainese plans to levy a 15% capital gains tax on cryptocurrency profits. However, the country’s former SEC chief opposes the move, encouraging policy that benefits the trade sector.
A report in November would back up the SEC chair’s claims. It showed that embracing cryptocurrencies further could create more rich citizens that multiply the nation’s GDP. Thankfully, crypto access is expected to expand in the country as Binance establishes its Thailand-based exchange.