The Monetary Authority of Thailand (Bank of Thailand) has issued a stern warning to local commercial banks over directly involving themselves in crypto trading.
In a December 8 announcement, Chayawadee Chai-Anant, the senior director of the central bank, warned all local commercial banks against direct involvement in crypto trading services, citing high risks associated with high price volatility:
“We don’t want banks to be directly involved in digital asset trading because banks are (responsible) for customer deposits and the public, and there is a risk.”
The central bank’s recent sentiment appears the same week the Tourism Authority declared Thailand a “crypto-friendly” state to attract more crypto tourists in the country.
Moreover, the crypto suppression appeared at the same time when many commercial banks continue accelerating crypto investments within local exchanges, according to the Bangkok Daily Post report.
In late August, Bank of Ayudhya, Thailand’s fifth-largest lender, invested $1.3 billion in Zipmex crypto exchange. Following the same suit, Siam Commercial Bank (SCB), the oldest bank in Thailand, successfully acquired a 51% stake in Bitkub, the country’s largest crypto exchange, in November.
Despite the crypto sector gaining robust popularity among individuals, companies, and commercial banks, the Bank of Thailand recently increased its stringent stance against digital assets.
Last week, Sakkapop Panyanukul, senior director of BoT, issued a stern warning to businesses against accepting crypto payments, stating:
“If other currencies are widely used, it will impact the central bank’s ability oversee the economy.”
In his recent announcement, Chai-Anant slammed digital assets, alleging that they are associated with high price volatility and risks of cyber theft, personal data leakage, and money laundering and could be detrimental to merchants and consumers, adding:
“If digital assets become widely used as a means of payment for goods and services, such risks could affect payment system stability, financial stability, and consumer protection.”
Although the Tourism Authority of Thailand recently described the country as “crypto-friendly” in its effort to tease the crypto-rich to visit the country, it is now clear that the central bank does not want the country to become too crypto-friendly.
It is worth noting that Thailand heavily depends on tourism to run its economy, which lately had been affected greatly by the Covid-19 pandemic, and now needs to be revived. At the time of publishing, many regions in Thailand remain closed, with just a few arrivals in the country.