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Bank Of Thailand Draws Lines For Crypto Industry

The Bank of Thailand will soon outline specific rules for the crypto industry to protect investors and the financial system. They will arrive in the form of a consultation on the “Financial Landscape” from the nation’s central bank next month.

Thailand’s Rules On Crypto

Central Bank Governor Sethaput Suthiwartnarueput explained the objectives of the forthcoming paper in an interview with Bloomberg on Monday. He said it would look for consensus regarding the “red lines” for the green finance and digital currency fields, among other areas.

Ultimately, the rules aim to reduce systemic risk while still promoting financial inclusion and innovative technology. These are similar to the goals repeatedly outlined by the SEC in the United States. While not outright opposed to cryptocurrencies like China, they wish to balance freedom and safety.

“We want to ensure that we strike the right balance between allowing financial innovation and managing risks,” said the governor.

Sethaput Suthiwart-Narueput, governor of the Bank of Thailand.
Sethaput Suthiwart-Narueput, governor of the Bank of Thailand. Source: Bloomberg

The nation’s central bank works directly with the SEC and Finance Ministry to identify what they “don’t want to see”. For instance, Sethaput said that he does not want cryptocurrencies to become “a means of payment”.

Last week, the Bank of Thailand warned commercial banks against involving themselves with cryptocurrencies due to their high volatility. Sethaput believes this makes digital assets “a risk to the financial system”. His comments are reminiscent of those from the Bank of England’s governor, who repeatedly stated that cryptocurrencies could cause a recession.

Ultimately, the governor thinks a central bank digital currency can accomplish cryptocurrencies without risks.

Cryptos Can’t Be Currencies?

Bitcoin is yet a cryptocurrency anywhere besides El Salvador. Instead, regulators seem to prefer that blockchains become a type of payment rail for ‘real’, fiat currencies.

Even many investors share this opinion. For example, while Michael Saylor remains the most significant Bitcoin investor globally, he maintains that it is ‘property’ and not ‘currency’. While Bitcoin will replace gold, he does not believe it can replace fiat.

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While Federal Reserve Chairman Jerome Powell considers Bitcoin a “failed currency,” he finds stablecoins a more pressing threat. Similarly, congresswoman Maxine Waters suspects that stablecoins could overthrow the dollar. Stablecoins, as their name implies, feature the stability of dollars along with the efficiencies of cryptocurrencies.

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