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SATURDAY, September 30, 2023

Crypto can only be used for guarantees as regulator eyes controls on digital tokens

Crypto can only be used for guarantees as regulator eyes controls on digital tokens
SATURDAY, March 26, 2022

When new rules come in force from April 1, buyers of property or vehicles will still be able to use digital money as a guarantee, but not to pay for the purchase, a senior official from the Bank of Thailand said recently.

Naphongthawat Phothikit, director of the central bank’s Payment Systems Policy Department, said the use of cryptocurrencies as deposits or investments is still allowed, though they will be banned as payment for goods and services.

Under the new rules, business operators including crypto exchanges are prohibited from providing payment services promoting the use of digital assets and cryptocurrency to pay for goods and services. This ban has been imposed because Thai authorities say the wider use of digital assets is threatening the country’s financial system and economy.

Meanwhile, the Securities and Exchange Commission (SEC) is gathering information to set measures for controlling the use of “utility tokens” or crypto tokens that allow users to get future access to goods or services provided by a certain company.

Surasak Ritthongpitak, director of SEC’s Market Supervision Department, said a public hearing on the matter will be held in April and expects the agency to set regulations on the use of utility tokens in the third or fourth quarter of this year.

The use of cryptocurrency as a means of payment has been banned after many young Thai investors increased their trade of digital assets in search of better returns amid the economic slowdown.

Thai investors are now holding up to 114.5 billion baht worth of digital assets, up from 9.6 billion baht a couple of years ago, Bloomberg reported on Wednesday, citing government data released in January.

It said average daily turnover has jumped to 4.8 billion baht from 240 million baht, with the number of active trading accounts swelling to 1.98 million from 170,000 before the pandemic.