“Cryptocurrencies cannot become a means of payment,” Bank of Thailand governor Sethaput Suthiwartnarueput stated.
The government of Thailand is preparing a new regulatory framework for cryptocurrencies like Bitcoin (BTC) in order to minimize risks and improve investor protection.
The Bank of Thailand (BoT) will release a consultation paper in January that will define “red lines” for the crypto industry, governor Sethaput Suthiwartnarueput said in a Dec. 14 interview with The Bangkok Post.
“We want to ensure that we strike the right balance between allowing financial innovation and managing risks,” the official stated. The new rules will provide adequate safeguards for consumers as “risks are under-appreciated” currently, Sethaput said.
The central bank is cooperating with the Thai Securities and Exchange Commission and the finance ministry to point out restrictions specific to the crypto industry. For example, “cryptocurrencies cannot become a means of payment,” Sethaput noted.
The governor emphasized that, despite local authorities potentially recognizing digital assets as an investment product, their extreme volatility poses risks to the financial system. Authorities will also collaborate to adopt proper safeguards for future financial securities, he added.
Thailand’s plans to enact new rules for cryptocurrencies come amid booming local cryptocurrency adoption. According to the report, the turnover at seven locally licensed crypto exchanges surged to 221 billion baht ($6.6 billion) in November 2021 from 18 billion baht ($538 million) a year earlier.
In early December, the Thai central bank warned commercial banks against “direct involvement” in trading cryptocurrencies, citing their high volatility and potential risks.