Central bank urges Thai banks not to offer trading in cryptocurrencies

The Bank of Thailand doesn’t want local banks or companies to use cryptocurrencies while the Ministry of Tourism is still trying to attract crypto whales.

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The Thai central bank has stated that it does not want commercial banks to directly participate in crypto asset trading.

The decree came from the central bank’s executive director, Chayawadee Chai-Anant, on Dec. 7, who cited the risks associated with high price volatility.

“We don’t want banks to be directly involved in trading digital assets because banks are (responsible) for customer and public deposits and there is always a risk.”

As reported by the Bangkok Post, the central bank’s recent crackdown on digital assets comes at a time when commercial banks are investing in local crypto exchanges.

In early November, Thailand’s oldest bank, Siam Professional Bank (SCB), announced that it was buying a 51% stake in the country’s largest cryptocurrency exchange, Bitkub. At the end of August, the Zipmex crypto exchange raised $ 1.3 billion in funding from the country’s fifth largest lender, Ayudhya Bank.

The Central Bank of Thailand (BoT) has taken an increasingly strict stance on digital assets despite its growing popularity in the country with individuals, corporations, and banks.

Last week, BoT Senior Director Sakkapop Panyanukul warned companies against accepting cryptocurrencies, stating, “If other currencies are widely used, it will affect their ability to accept cryptocurrencies. Central bank oversight of the economy.” With regard to tokens that are not covered by the asset, he calls them “empty coins”.

The central bank also expressed concern about the use of cryptocurrencies to pay for goods and services. In a related report on December 8, Chai-Anant commented that digital assets can be harmful to sellers and consumers because they are “associated with high price volatility and the risk of cyber theft, data loss and money laundering.”

“If digital assets are widely used as a means of payment for goods and services, such risks could affect the stability of the payment system, financial stability and consumer safety.”

Related: Thai lawmakers are demanding the approval of tourist cryptocurrencies to attract digital nomads

The BoT warnings come just a fortnight after the UK Department of Tourism stepped up efforts to encourage crypto-rich people to visit the country. Thailand’s tourism authority has labeled the country “crypto-friendly,” but apparently central banks don’t want it to be too friendly.

Thailand’s economy is heavily dependent on tourism, which was devastated during the pandemic. Much of the kingdom is locked down at the time of writing, despite efforts to lure crypto nomads and the like to a country the central bank does not want to use, with very few arrivals.