Thailand to ban crypto payments from April

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Thailand’s Securities and Exchange Commission (SEC) said on Wednesday that it is banning the use of crypto currencies for payment of goods and services as of April 1st.

The decision is in line with earlier consultations between SEC and the Bank of Thailand (BOT) on the need to regulate such payments facilitated by digital asset business operators, because they could impact the country’s financial stability and overall economy, the Regulator said in a statement.

“Crypto payments may affect the stability of the financial system and overall economic system, including risks to people and businesses,” the statement reads.

The main concerns, which SEC wants to address with the new regulations, apart from protecting the stability of the country’s financial and monetary systems, include money laundering and other cyber crimes.

SEC points out in its statement that digital assets do not help to improve the efficiency of the payments market, because of their intrinsic volatility and high transaction costs.

Digital asset business operators which provide such services must comply with the new rules within 30 days from the effective date – April 1st, SEC also said.

The ruling however, does not ban investment in crypto currencies, which has become increasingly popular in Thailand in the past year.

SEC specifically stressed that the new rules does not represent a ban on crypto trading and digital assets in general, but just a ban on the use of cryptos as a means of payment.

In early March the Thai financial authorities announced that all crypto trades on government approved exchanges will be exempt from the 7% value added tax (VAT) until 2023.

On its part the Bank of Thailand has repeatedly warned that it does not support the use of crypto currencies as a means of payment for goods and services, because of its inability to step in and provide assistance in case of abuse.

The new rules also ban the promotion of crypto currencies for payments as well as the distribution of software and devices used for that end.

In addition, operators of digital asset businesses must warn their clients of the ban and suspend their accounts in case of violations of the new guidelines.

Back in January, the Thai authorities announced a plan to regulate digital asset payments in the country, while the regulatory authorities in Indonesia also warned financial companies not to offer or facilitate crypto payments.

In another development earlier in March the European Supervisory Authorities (ESAs) warned the public that many crypto assets are highly risky and speculative and consumers “face the very real possibility of losing all their invested money if they buy these assets”.
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That's pretty unfortunate for the industry in that region, though it's always possible they may change their mind in the future.