Thailand Bans Use of Crypto to Pay for Goods and Services

Thai Finance Minister Arkhom Termpittayapaisith speaks during an interview in Bangkok. Photo: Reuters.

Thai financial authorities say they have reviewed the benefits and risks of digital assets and decided they must restrict their use to avoid possible impacts on the country’s financial stability.

The Bank of Thailand (BOT) and the Securities and Exchange Commission (SEC) said in a statement that digital asset business operators had expanded their businesses to cover services related to the use of digital assets as payments.

They feared that these moves may result in a wider adoption of cryptocurrencies, and could potentially impact the overall economic system.

In a bid to limit risks, they will not allow crypto coins or digital assets to be used to pay for goods or services, they said.

The news was no surprise, given that the central bank has said repeatedly it does not support use of crypto as payments.

Public hearing

Officials from the Finance Ministry, the central bank and market regulator began a two-week public hearing on Tuesday to determine guidelines on setting up an appropriate framework – for trade and (limited) use of digital assets.

The hearing will run till February 8 before the new rule takes effect, Charuphan Intararoong, assistant secretary-general at the Securities and Exchange Commission (SEC), told a news conference.

It would not cover use of digital assets as payments between merchants and customers yet, while trading of crypto assets was still allowed, she added.

“Investors, consumers, and citizens can still trade digital assets for investment as usual,” Charuphan said.

The central bank and relevant agencies will consider allowing digital assets that are beneficial to the country to operate, however, assistant central bank governor Siritida Panomwon Na Ayudhya, said without elaborating.

Boom in digital transactions

Thailand expects to decide on more guidelines soon for a cryptocurrency tax that was introduced in 2018, in an effort to make it fairer and simpler, the Finance minister said on Wednesday, following a surge in digital asset trading.

The government has supported utilising digital assets to help build the economy without affecting financial stability, Finance Minister Arkhom Termpittayapaisith told a business seminar.

Cryptocurrencies have gained momentum in Thailand, which saw as much as 251 billion baht ($7.62 billion) in digital asset trading transactions in November, data from the SEC showed.

• Reuters with additional editing by Jim Pollard