- Thailand SEC has announced new rules to ban the use of cryptocurrencies as modes of payment.
- The regulator said crypto payments threaten the stability of the payment system in the country.
- The SEC believes there is a risk of crypto being used for money laundering.
The Securities and Exchange Commission (SEC) of Thailand announced a ban on the use of cryptocurrencies as a mode of payment. According to the news on March 23, it will be illegal to pay for goods and services with the help of crypto starting from April 01, 2022.
In addition, the regulator says that such a means of payment threatens the stability of the payment system in the country, which is already “highly efficient.”
Likewise, cryptocurrencies powered by public blockchains do not stick to security standards which makes investor protection more challenging. Pricing goods in crypto will stop the Bank of Thailand from helping financial institutions during liquidity crises.
The SEC says:
The volatility of cryptos is also one of the main reasons behind the decision. Even though some crypto payment providers instantly convert digital assets to the baht, there are still hidden costs involved in such a transaction.
Moreover, using multiple payment systems may be expensive and confusing for consumers. There is also a risk of crypto being used for money laundering or as a tool for financing terrorism.
After the law becomes effective, none of the Thai businesses can accept or promote taking crypto as payments. In case of any violation, the firm will face legal actions, including temporary suspension or cancellation of the services.
In addition to banning crypto payments, the Thai SEC proposed a new rule. The rules disclosure of service quality and IT usage information from crypto businesses will include brokers, exchanges, and dealers.
Similarly, the Bank of Thailand and SEC, along with other local government agencies are certain about the benefits of underlying technologies. The technology includes blockchain value and supports the use of technology to further innovation.