On a circular which it issued, the Bank of Thailand (BOT) asked financial institutions in the country to not partake in cryptocurrency transactions for fear of possible unregulated trading problems since the very presence of these digital currencies lies outside international regulation.
The governor of the central bank, Mr. Wisit Santiprabop, signed the circular which made the following cryptocurrency activities to be banned by Thai banks.
- Investing or trading in cryptocurrency.
- Exchanging cryptocurrencies.
- Creating platforms for cryptocurrency trading.
- Allowing clients to use credit cards to buy cryptocurrencies.
- Advising customers on cryptocurrency investing or trading.
The central bank also stated that cryptocurrencies were not a legal tender in Thailand and it was worried that their use would result in illegal activities like money laundering, support the efforts of terrorism and inciting chaos.
In effect of such circular, Thai banks started complying to the same. Ms. Prasanee Auiyamaphan, a Bangkok Bank Executive Assistant was quoted saying, “Our bank has no policy to provide crypto-exchange services and these cryptocurrencies cannot be exchanged for hard cash from the bank.”
Other banks followed suit as Mr. Thana Thienachariya, Senior Executive VP and Chief Marketing Officer at Siam Commercial Bank said that its subsidiary Digital Ventures Co. Ltd. had previously formed a strategic alliance with Ripple to streamline a payment service between Japan and Thailand, but now with regards to such a government circular, that plan has to be revised and issue will be discussed with the central bank.
Mr. Thakorn Piyapan, Head of Krungsri Consumer Group and an executive of Digital Banking and Innovation at Bank of Ayudhya explained that to prevent customers from buying cryptocurrencies using credit cards, banks should first observe the type of transactions made by the people buying cryptocurrencies and then depending upon the outcome, action should be taken to either accept or to suspend the means altogether.
Meanwhile, the Thai government stated that they were developing a regulatory framework for the use of cryptocurrencies.