Thailand's Securities and Exchange Commission (SEC) has announced a total ban on the use of cryptocurrencies as payment methods, while also proposing new rules that would require crypto firms to disclose certain details regarding their systems.
According to an announcement issued by the regulator, the ban is part of an ongoing effort to establish a regulated crypto market Thailand's growing crypto consumers. The advisory for businesses within its jurisdiction outlines how crypto payments should not be processed, starting April 2022. The advisory is a result of a series of discussions with the Bank of Thailand (BOT), the country's central bank.
Meanwhile, the new requirements for crypto firms would now include disclosures regarding service quality and aggregated information on a firm's technology usage. This new rule will be implemented for brokers, exchanges, and dealers.
This means that crypto firms operating in the country could no longer advertise accepting crypto as a payment method, and also extends to the cessation of any ongoing development that a crypto firm may be doing for payment systems, tools, and wallets that are built on top of crypto protocols. Additionally, these businesses will be required to send monthly reports to the Thai SEC, while the reports themselves are required to be published on a business' website based on the same timeline.
"[...] the BOT and the SEC, as well as other government agencies, recognize the benefits of technologies behind digital assets such as blockchain and value and support the use of technology to further innovation," says the regulator in a proposal.
Thailand's government has been pursuing an aggressive stance towards crypto, going on to claim that it will be preparing a comprehensive regulatory framework that would be able to define the "red lines" for the country's burgeoning crypto sector.
In contrast, the country's finance ministry eased up several crypto tax regulations some two weeks ago, as a way to incentivize and promote digital asset investments. This latest tax policy from Thailand's finance ministry provided exemptions for crypto traders from the mandated value-added tax (VAT) of 7%, but only if their trades are done on authorized exchanges. The revision for this tax policy also allows crypto traders to offset annual losses against gains across their whole portfolio.
"[Crypto payments] may affect the stability of the financial system and overall economic system including risks to people and businesses," claims a joint research conducted by the BOT and SEC.
Thailand's SEC also highlights several risk factors that include loss of value due to price volatility, theft, money laundering, and the compromise of personal data or information. According to the Thai SEC, crypto firms who do not comply will be subjected to legal action, which may result to temporary suspension or the issuance of a cease and desist order.
According to the Thai regulator, these initiatives were made in order to ensure investor security and setting a baseline for the quality of services as provided by crypto firms operating in the country.
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