SEC Thailand Bans Cryptocurrencies As Payment Instruments, Why?

Thai regulators ban payments using cryptocurrencies. (photo: doc. Unslpash)

JAKARTA – The Securities and Exchange Commission of Thailand (SEC) recently banned cryptocurrencies from being used as payment instruments. Along with the announcement, the regulator suggested new rules to disclose the quality of IT services and information in the crypto industry, reported by Cointelegraph.

In Thailand's SEC announcement, businesses that accept crypto payments are advised to discontinue starting next April. In this case the SEC discussed the matter with the country's central bank Bank of Thailand (BOT).

From the results of the discussion, crypto payments are considered "can affect the stability of the financial system and the economic system as a whole including risks to people and businesses."

Some of the risks highlighted by the SEC include loss of value caused by price volatility, cyber theft, money laundering, and leakage of personal data. Once implemented, businesses in Thailand will be banned from advertising accepting crypto payments and building systems, tools and wallets to facilitate crypto transactions.

Businesses found not complying with the new crypto laws will be subject to legal action including temporary suspension or cancellation of services.

“However, the BOT and SEC, as well as other government agencies, recognize the technological benefits behind digital assets such as blockchain and value and support the use of technology for further innovation.”

In addition, the Thai SEC's proposal aims to further ensure the safety of investors by measuring the quality of services provided by crypto businesses. According to a rough translation, the SEC proposes digital asset operators to:

“Prepare and submit [a report on quality of service and system capacity utilization] to the SEC office on a monthly basis within the 5th day of the following month.”

Apart from sending monthly reports to the Thai SEC, the proposal also directs crypto businesses to disclose reports on their official websites at the same time.

The chart shared by the SEC further highlights the various complaints received over the past 12 months related to system failures, service not meeting the desired conditions, spending and others. Based on the data, Thai investors face the highest issue regarding spending, which may be one of the main reasons for the ban on crypto payments. Previously the Thai government had also set a tax for the crypto industry.