Thailand's central bank does not want local banks to trade cryptocurrency

Briefly:

  • Central Bank of Thailand against banks trading in cryptocurrency
  • The regulator fears losses due to high volatility of quotations
  • Also, the Central Bank will not accept cryptocurrencies as a means of payment
  • But at the same time in other sectors of the country’s economy their demand is only growing

The Central Bank of Thailand has called on local banks to stop trading digital assets. According to the regulator, this is too risky due to high exchange rate fluctuations.

“We do not want commercial banks to be directly involved in digital asset trading. These organizations are directly responsible for the deposits of the population, ”said the head of the regulator Chayawadi Chay-Anantom.

The ban came against the background of large transactions of Thai commercial banks in the crypto sector. So, for example, Bank of Ayudhya Plc invested 1.3 billion baht (about 400 thousand dollars ) to the Zipmex exchange. And Siam Commercial Bank Plc acquired Bitkub Coin (KUB) at 20 billion baht ($ 5.3 million).

However, the recommendations of the Central Bank do not apply to transactions for the purchase of shares of fintech firms and crypto-exchanges. The regulator has nothing against these investments.

Over the past two years, the crypto sector in Thailand has gained momentum. Many companies, including retailers, accept cryptocurrencies as payment. Counterparties are interested in investing in this sector.

The Ministry of Tourism wants to legalize cryptocurrency in order to attract financial tourists and investors to the country. However, some other politicians oppose this. In particular, the Prime Minister of Thailand expressed concern about the growth of this sector.

Currently there are eight licensed exchanges in the country. In November, their turnover reached 220 billion baht (61, $ 2 million).

Last week, the central bank also issued a warning that it will not accept cryptocurrency as a means of payment. According to the statement of the representative of the regulator, this will undermine the ability of the authority to control financial flows.

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