Thailand Bans Use of Cryptocurrencies for Payments

The ban does not apply to crypto used for investment purposes, according to Thailand's Securities and Exchange Commission.

By Andrew Asmakov

Thailand. 

Thailand's Security and Exchange Commission (SEC) announced that it will implement a ban on crypto as a payment method starting from April 1, 2022.

In a statement on Wednesday, the regulator said that cryptocurrencies may affect the financial system's stability, posing risks to the country's economy.

Other risks highlighted by the SEC include the loss of value due to price volatility, cyber ​​theft, and personal data leakage. The regulator added that cryptocurrencies such as Bitcoin may be used as a tool of money laundering.

The move aligns with earlier discussions between the SEC and the Bank of Thailand (BOT). The two entities previously weighed the benefits and risks of crypto, concluding that crypto businesses need to be regulated.

While the restrictions on crypto payments will be effective on April 1, digital asset business operators that provide such services will have until the end of April to comply with the new rules, the Thai regulator said.

This includes halting all advertisements soliciting crypto payments and warning clients against the use of crypto for the same.

The agency stressed that both it and BOT "see the benefits of various technologies behind digital assets such as blockchain and emphasize and support the use of technology to further innovation."

The regulator added that it is not banning the use of crypto for investment purposes.

Thailand and crypto

Today's announcement is likely to be a blow for many Thais who own cryptocurrencies.

Per a Bloomberg report citing the Thai government data, as of January 2022, the value of digital assets held by citizens has soared to 114.5 billion baht ($3.4 billion) from 9.6 billion baht just a few years ago.

The Tourism Authority of Thailand (TAT) also nourished hopes that cryptocurrencies would help attract wealthy tourists to boost the nation's post-pandemic economy.

"Crypto is the future, so we must make Thailand a crypto-positive society to welcome this group of quality tourists," TAT Governor Yuthasak Supasorn said last November.

At the same time, effective from April 2022 to December 2023, new tax relief measures will include the exemption of a 7% value-added tax (VAT) on crypto trades on regulated exchanges.

Before that, Thailand's revenue department abandoned earlier plans to impose a 15% withholding tax on crypto transactions, which means that crypto traders will be able to offset their annual losses against gains that have been made in the same year.