Thailand’s SEC Bans Crypto Payments

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The Securities and Exchange Commission (SEC) of Thailand has been working on creating a regulated crypto market in the country for the general public. In its ongoing efforts to accomplish this goal, the regulatory authority has decided to impose a ban on using crypto for making payments. Not only have they imposed this ban, but the Thai SEC has also proposed a new rule that would require crypto businesses, such as exchanges, brokers and dealers, to disclose IT usage and service quality information. The SEC issued a notice in which it said that businesses in the country had been told to stop accepting crypto payments from April onwards, after it had had a discussion with the Bank of Thailand (BOT) about its implications.

The joint study of the SEC and the BOT concluded that the stability of the financial system was at risk because of crypto payments, as was the economic stability including risks to businesses and people. The SEC went on to highlight some of these risks, which include cyber theft, personal data leakage, money laundering and losses in value due to volatility in price. The implementation of the new rule would mean that businesses in Thailand would not be able to accept crypto payments and would not be permitted to establish systems, wallets and tools that facilitate crypto transactions.

All businesses that fail to comply with the new crypto laws will have to face legal actions, which include cancellation of services or even temporary suspension. However, the SEC as well as the BOT, along with other government agencies, are aware of the benefits associated with the technology behind these digital currencies namely blockchain. Moreover, they also support and value the use of technology for ensuring innovation. The proposal of the Thai SEC is aimed at ensuring investor security, which involves gauging the quality of services that are provided by crypto businesses.

Therefore, the SEC has proposed that these digital asset businesses should prepare and provide system capacity utilization and service quality reports on a monthly basis to the SEC by the 5th of the following month. Not only are businesses required to send monthly reports to the SEC, crypto businesses are also directed to publish their reports on their websites in the same time period. The SEC stated that it had received a number of complaints in the last 12 months that were related to system failure, shopping, services not meeting the required conditions and more.

The data showed that the highest number of problems that Thai investors had faced were related to shopping, which could be one of the reasons why the crypto payments ban was imposed. Back in December 2021, there had been reports that the Thai government was working on developing a crypto regulatory framework. The finance ministry had relaxed their crypto tax regulations in March 2022 for promoting investments in digital assets. Thanks to the new tax policy, crypto investors don’t have to pay the 7% value-added tax (VAT) when they trade on authorized exchanges. Traders will also be able to use the tax policy for offsetting their losses against profits.