Thailand Bans Crypto Payments, Businesses to Have Until End of April to Adhere to New Law

Cryptocurrency businesses and services in Thailand may be looking at rough days ahead, as the country has set its intentions to restrict the operability of the sector. Thailand will be banning the use of cryptocurrencies as payment option for commodities and services on April 1. Related business operators have been directed to suspend all such crypto payment service providers and facilitators. However, trading and investing in these digital assets will not be affected.

The Securities and Exchange Commission of Thailand will be ensuring that crypto companies in the country adhere to the new instructions withing 30 days, starting from April 1.

Thailand is not on board with promoting cryptocurrencies as a payments option. The country is concerned that cryptocurrencies could disturb the economic stability and fiat position by letting crypto assets be used for daily purchases.

“The Bank of Thailand (BOT) and the Securities and Exchange Commission (SEC) saw the need to regulate and control the use of digital assets as a medium for payment because it may affect the stability of the financial system and the overall economy,” the SEC, which also acts as Thailand's crypto regulator, said in a statement.

Thai authorities fear that allowing crypto payments will expose people to financial risks that could be caused by price volatility, cyber theft, and personal data leaks. In addition, the misuse of cryptocurrencies to fund illicit activities is also something that Thailand is aiming to curb.

While the new rule is set to come into effect from the beginning of next month, businesses will have until the end of April to restructure their working models in accordance with the new legal requirement.

“For digital asset business operators that have already provided [crypto payment] services must comply with the rules within 30 days from April 1, 2022,” the SEC added.

The development comes days after it surfaced that some Thailand financial bodies were considering to take crypto payments from tourist visitors. Amid its war with Ukraine, Russia has been barred from several financial ecosystems as a penalty. Crypto firms have also had to restrict sanctioned Russian individuals and firms to use their crypto holdings.

As per reports, the Phuket Tourist Association (PTA) and the Bank of Thailand (BOT) were considering to accept crypto payments from Russia.

The move could have helped Russian crypto holders, especially the sanctioned entities, to liquidate their crypto assets in Thailand.

Thailand's complicated relationship with the crypto sector, meanwhile, continues to see ups and downs. As per a study by crypto research firm TripleA, over 3.6 million citizens, making for 5.2 percent of Thailand's total population, currently own cryptocurrency.

The Stock Exchange of Thailand is awaiting approvals from the Thai SEC to allow its users to invest in cryptocurrencies via its platform very soon.

Following a severe backlash from its crypto community in February, Thailand rolled back its 15 percent tax on financial profits churned out of the trading and mining of digital assets.