Thailand’s government is working on a new legal framework for cryptocurrencies such as Bitcoin (BTC) in order to reduce risks and safeguard investors.
In a Dec. 14 interview with The Bangkok Post, Governor Sethaput Suthiwartnarueput stated the Bank of Thailand (BoT) will produce a consultation document in January that will identify “red lines” for the crypto industry.
“We want to make sure we strike the correct balance between encouraging financial innovation and risk management,” the person explained. Because “risks are now under-appreciated,” the new rules will provide enough safeguards for customers, according to Sethaput.
The central bank is working with the Thai Securities and Exchange Commission and the finance ministry to highlight crypto-industry-specific regulations. “Cryptocurrencies cannot become a form of payment”, for example, according to Sethaput.
On the other hand, municipal governments may recognise digital assets as an investment product. However, the governor stated that their excessive volatility posed a risk to the financial system. He also stated that authorities will work together to adopt appropriate safeguards for future financial securities.
Thailand’s efforts to pass new cryptocurrency regulations coincide with the country’s rapid embrace of digital currency. According to the research, in November 2021, turnover at seven domestically licenced crypto exchanges increased to 221 billion baht ($6.6 billion). Up from 18 billion baht ($538 million) a year earlier.
The Thai central bank issued a warning to commercial banks in early December. Advising them to avoid “direct involvement” in cryptocurrency trading due to the high volatility and potential hazards.