The market regulator in Thailand said on Wednesday that new regulations have been published that would make it illegal to pay using digital assets from April 1.
The Securities and Exchange Commission (SEC) and Bank of Thailand (BOT) had earlier discussed the necessity of regulating digital asset business operators since such activity might have an influence on Thailand’s financial stability and the economy as a whole, the SEC said in a statement.
Thailand’s financial stability will be safeguarded by a ban
According to the SEC, cryptocurrency payments might harm Thailand’s economic stability. In light of recent volatility in the crypto market, this position is likely based on the belief that this medium is unsuitable as a form of currency.
Reuters reports that there is a 30-day grace period for crypto payment service providers. Cryptocurrency has been legalized as an investment vehicle, but not as a form of currency in most other nations.
Indonesia, a Southeast Asian country, has recently issued a warning to banking institutions against enabling crypto payments. Only El Salvador has made cryptocurrency legal tender to this point.
Regulation in Thailand is still crypto-friendly
However, despite a restriction on the use of cryptocurrency as legal tender, the Thai government still maintains a policy to encourage the usage of crypto.
The government recently abandoned a proposed 15% tax on cryptocurrency investments and instead exempted value-added tax from transactions on some crypto exchanges.
The government also enabled cryptocurrency investors to credit their yearly losses against their profits in order to reduce their tax burden.
The announcements follow a boom in Southeast Asia’s second-biggest economy’s embrace of cryptocurrencies.
DeFi adoption in Thailand was rated third in Chainalysis’s list of nations with the most DeFi adoption in 2021.
The 2021 global crypto adoption index of the crypto aggregator places it as the 12th most popular cryptocurrency in the world.