Commercial banks in Thailand and other financial institutions are now allowed to engage in cryptocurrency activities, but under a set of rules.
The Bank of Thailand (BoT) issued a circular earlier this month to all banks and financial institutions, thus effectively voiding the previous BoT document on the subject from February. Back then the central bank banned Thai financial institutions from investing or trading in cryptocurrencies, offering cryptocurrency exchanges and creating platforms for cryptocurrency trading.
Now, the commercial banks and financial institutions in Thailand and their subsidiaries such as asset managers, brokerages, insurance firms, etc. can invest in cryptocurrencies and in some cases issue digital tokens, but have to comply with certain rules listed in the circular.
First and foremost, the financial companies in Thailand are not allowed to make any transactions related to customers or issue “digital credit cards”. Second, all activities must be subject to “rigorous risk management”.
The subsidiaries of the financial companies will be allowed to trade in cryptos and issue digital tokens. They need to get permission from their respective regulatory body – the Thai Securities and Exchange Commission (SEC) for brokers or the Thai Office of Insurance Commission (OIC) for insurance companies. New subsidiaries, established for the purpose of crypto investments, however, will have to apply for approval from the BoT. Applications will be reviewed on a case-by-case basis.
The commercial banks themselves will not be allowed to issue digital tokens, buy or sell them, provide services for the buying and selling or give advice to unaccredited investors in that regard. They will only be permitted to issue and invest in cryptos for the purpose of improving customer service, but after being accepted to BoT’s regulatory sandbox.
Like many other countries, Thailand’s relationship with cryptocurrencies has been somewhat tense. Following the BoT circular from February, in May the government released two royal decrees on cryptocurrencies and ICOs and in June it transpired that the regulatory framework would be ready soon.
Meanwhile, the largest movie theater chain in Thailand, Major Cineplex, teamed up with the Swiss fintech developer RapidzPay to deploy a payments ecosystem and allow customers to buy everything from popcorn to movie tickets with Bitcoin and other cryptocurrencies.