Thailand Securities and Exchange Commission announced Wednesday that it has prohibited the use of cryptocurrencies as a payment mechanism, citing the necessity to preserve the country’s economy and financial system as justifications.
Due to their extreme volatility and excessive transaction costs, cryptocurrencies like as bitcoin and Ethereum will no longer be permitted to use to pay for goods and services beginning April 1, 2022, according to the Wednesday announcement.
The approach is consistent with earlier conversations between the Thai Securities and Exchange Commission and the Bank of Thailand (BoT). The duo weighed the benefits and hazards of cryptocurrencies and came to the conclusion that the industry needed some oversight.
By the end of April, crypto exchanges and other crypto-related company owners must cease all ads supporting crypto payments. They must also warn clients against using cryptocurrency for the same purpose. The SEC stated in the statement that the restriction of crypto payments is necessary because they endanger the country’s economy and financial stability.
Using a currency other than the Thai Baht jeopardizes monetary transmission policy. Furthermore, pricing things in cryptocurrency will prevent the BoT from intervening and providing financial assistance in the event of a liquidity crisis in the country. There are also fears that digital assets may be exploited for money laundering or to support terrorism.
Today’s announcement is a significant setback for Thai cryptocurrency investors. Thailand is become one of the world’s top countries in terms of cryptocurrency adoption in recent years. According to a March 4th survey, Thailand is rated eighth in the world in terms of on-chain value received.
Nonetheless, there is a silver lining to the SEC’s new pronouncement. While Thai regulators crack down on cryptocurrency, the SEC reiterated that both it and the central bank recognize the benefits of different technologies underlying digital assets such as blockchain and highlight and promote the use of technology to foster innovation.
The restriction only applies to crypto payments, so users may continue to keep and sell digital assets as they like. Thailand has relaxed tax restrictions for cryptocurrency trading until 2023 in an effort to grow the industry.