“Cryptocurrency cannot become a means of payment,” said the Governor of the Bank of Thailand, Sethaput Suthiwartnarueput.

The Thai government is preparing a new regulatory framework for cryptocurrencies like Bitcoin (BTC) to reduce risk and improve investor protection.

Governor Sethaput Suthiwartnarueput said: The Bank of Thailand (BoT) will publish a consultation document in January to define a “red line” for the crypto industry.

“We want to make sure we find the right balance between enabling financial innovation and managing risk,” the official said. The new rules will provide adequate protection for consumers as “the risk is currently underestimated,” Sethaput said.

The central bank is working with Thailand’s Securities and Exchange Commission and the Treasury Department to point out specific restrictions on the crypto industry. “For example, cryptocurrency cannot become a means of payment,” noted Sethaput.

The governor stressed that while local governments have the ability to recognize digital assets as an investment product, their extreme volatility poses risks to the financial system. Authorities will also work together to put in place appropriate safeguards for financial stocks in the future, he added.

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

Thailand’s plans to enact new rules on cryptocurrencies come amid the booming local crypto adoption. According to the report, sales on seven locally licensed crypto exchanges rose to 221 billion baht ($ 6.6 billion) in November 2021 from 18 billion baht ($ 538 million) a year earlier.

Thailand’s central bank warned commercial banks against “direct participation” in cryptocurrency trading in early December, pointing to their high volatility and potential risks.