The Thai government is preparing a new regulatory framework for cryptocurrencies like Bitcoin (BTC) to minimize risk and improve investor protection.
Bank of Thailand (BoT) to release consultation paper in January that will set ‘red lines’ for the crypto industry, Governor Sethaput Suthiwartnarueput noted in a December 14 interview with The Bangkok Post.
“We want to make sure we strike the right balance between enabling financial innovation and managing risk,” the official said. The new rules will provide adequate guarantees to consumers because “the risks are currently underestimated,” Sethaput said.
The central bank is cooperating with the Thai Securities and Exchange Commission and the Ministry of Finance to report restrictions specific to the crypto industry. For example, “cryptocurrencies cannot become a means of payment,” Sethaput noted.
The governor pointed out that while local authorities potentially recognize digital assets as an investment product, their extreme volatility poses risks to the financial system. The authorities will also work together to adopt appropriate guarantees for future financial guarantees, he added.
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Thailand’s plans to enact new rules for cryptocurrencies come amid a booming local adoption of cryptocurrencies. According to the report, revenue from seven locally licensed crypto exchanges reached 221 billion baht ($ 6.6 billion) in November 2021, up from 18 billion baht ($ 538 million) a year earlier.
In early December, Thailand’s central bank warned commercial banks against “direct involvement” in cryptocurrency trading, citing their high volatility and potential risks.