Continuing its decisive development spree for the optimal growth of the cryptocurrency sector, the Bank of Thailand (BoT) passed a resolution to allow local banks to set-up cryptocurrency-focused subsidiaries for dealing with related businesses.
Thailand’s Cryptocurrency Push
As reported by local news outlet Blognone on August 3, Thailand’s locally incorporated banks can now provide cryptocurrency brokerage services to their clientele, in addition to investing in digital assets in a personal capacity, issuing tokens and funding cryptocurrency businesses.
However, banks are still prohibited to hold or facilitate transactions via cryptocurrencies. Also, all businesses that banks provide their financial service to must be registered and recognized by the Office of Insurance Commission (OIC) and the Thai Securities and Exchange Commission. Individual cryptocurrency enthusiasts and sole proprietors are, therefore, not a beneficiary of this development.
Furthermore, such subsidiaries are limited to providing their services to firms that utilize blockchain technology and cryptocurrencies in sectors other than finance. The report mentioned token issuers and digital assets promising financial innovation or augmentation of existing economic frameworks must use the BoT Regulatory Sandbox path instead.
The development comes after much redactions from the Thai government and banking authorities.
A Rollercoaster Ride
Earlier in 2018, BoT prohibited all banks and financial institutions from trading and investing in cryptocurrencies. Exchange businesses were strictly frowned upon regardless of a legal pathway in place to register a cryptocurrency bourse.
The circular asked all banks to refrain from providing and advising clients on making investments and trading decisions about cryptocurrencies, in addition to banning the use of credit cards for transacting with crypto-related businesses.
However, the center soon turned optimistic about the digital asset sector in May 2018, classifying all cryptocurrencies as “digital tokens” under the regulation of the Thai SEC.
Later, in June 2018, the central bank revealed its plans to develop a state-backed cryptocurrency for facilitating interbank settlements and cross-border payments, by way of a Central Bank Digital Currency (CBDC).
At the time, the bank noted the benefits of using a CBDC, such as reduced transaction times, cutting down payment costs, and reducing fraud due to the elimination of intermediaries in the banking process.
In July 2018, the Thai government released ICO regulations, becoming one of the world’s first significant jurisdictions to allow token issuers for conducting their business.
In the same month, governor of the Bank of Thailand, Dr. Veerathai Santiprabhob, alluded to the use of blockchain technology as part of a national effort to further Thailand’s economic potential during his speech at the Bloomberg ASEAN Business Summit, as reported by CryptoSlate.
Cover Photo by Alin Meceanu on Unsplash