Thailand to ban use of crypto for payments

BANGKOK • Thailand will bar the use of cryptocurrencies as a means of payment for goods and services, saying the wider use of digital assets threatens the nation's financial system and economy.

Business operators - including crypto exchanges - must not provide such payment services, and are barred from acting in a manner that promotes the use of digital assets to pay for goods or services, the Securities and Exchange Commission said in a statement.

However, the new regulation will not affect trading or investments in digital assets, the agency said.

While the restrictions on the use of digital currencies for transactions will be effective starting April 1, companies will have until the end of April to comply with the new rules, the regulator said.

It added that the curbs on cryptocurrencies such as Bitcoin for commercial transactions are in line with regulations in Europe, Britain, South Korea and Malaysia.

Thailand's crackdown on digital assets comes as individuals - especially young investors - boost their crypto trading in search of better returns amid the country's economic slowdown. Commercial banks have been cautioned against direct involvement in the trading of digital assets due to high volatility, uncertainty and risk.

The development of any unit of pricing other than the Thai baht will increase the cost of economic activities and reduce the efficiency of monetary policy transmission, the regulator said. In the event of a liquidity crisis, the Bank of Thailand will not be able to provide assistance to various financial institutions in forms other than the baht, it said.

The value of digital assets held by Thais has soared to 114.5 billion baht (S$4.6 billion) from 9.6 billion baht a couple of years ago, the government said in January.

BLOOMBERG