Thailand is to bar the use of cryptocurrencies as a means of payments for goods and services, saying that the wider use of digital assets threatens the nation’s financial system and economy.
Business operators — including cryptoexchanges — must not provide such payment services, and are barred from acting in a manner that promotes the use of digital assets to pay for goods or services, the Thai Securities and Exchange Commission said in a statement yesterday.
However, the new regulation would not affect trading or investments in digital assets, the agency said.
While the restrictions on the use of digital currencies for transactions takes effect from Friday next week, companies are to have until the end of next month to comply with the new rules, it said.
The curbs on cryptocurrencies such as bitcoin for commercial transactions are in line with regulations in Europe, the UK, South Korea and Malaysia, it said.
Thailand’s crackdown on digital assets comes as individuals — especially young investors — are increasing their cryptotrading in search of better returns amid the country’s economic slowdown.
Commercial banks have been cautioned against direct involvement in the trading of digital assets due to high volatility, uncertainty and risk.
The development of any unit of pricing other than the Thai baht would increase the cost of economic activities and reduce the efficiency of monetary policy transmission, the agency said.
In the event of a liquidity crisis, the Bank of Thailand could not provide assistance to various financial institutions in forms other than the baht, it said.
Under the change, digital-asset service providers are required to halt advertising, soliciting or establishing a system to facilitate payment of goods and services via digital wallets.
Business operators must warn clients against the use of digital assets for payments and may cancel their accounts if they are found breaching the rules, it said.
In related news, cryptocurrency trading conducted in rubles on exchanges appears to continue to decline, while regulators remain adamant that digital assets are being used by Russians to evade sanctions.
As of Friday, ruble-denominated cryptotrading volume had dropped by more than half from a peak of about US$70 million on March 7, data from blockchain analytic firm Chainalysis showed.
At about US$7.4 million, the ruble trading volume only counts as a fraction of volume globally. Bitcoin’s daily total volume averages between US$20 billion and US$40 billion.
Data provided by cryptodata firm Kaiko also shows that ruble-denominated tether stablecoin activities, the most popular ruble trading pair, is down from a March 7 peak of about US$38 million, with a volume of less than US$5 million reported on Tuesday.
Kaiko said that only three global cryptoexchanges — Binance (幣安), Yobit and LocalBitcoins — are offering ruble-denominated cryptotrading pairs.
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