Since December 2021, the Thai government has been developing a new regulatory framework for the cryptocurrency business by creating “red lines.”
The Thailand Securities and Exchange Commission (SEC) imposed a prohibition on the use of cryptocurrencies for payment in a continuing endeavour to create a regulated crypto market for the general public. Simultaneously, the Commission proposed a new regulation requiring crypto firms, including brokers, exchanges, and dealers, to provide service quality and IT use statistics.
According to the Thai Securities and Exchange Commission’s notification, firms in the area have been cautioned against taking crypto payments beginning in April 2022 after consulting with the Bank of Thailand about the ramifications.
The BOT and SEC determined in their joint research that: “[Crypto payments] may endanger the financial system’s and entire economic system’s stability, posing threats to individuals and enterprises.”
The SEC highlights many of these concerns, including value loss due to market fluctuation, cyber theft, money laundering, and personal data exposure. Once enforced, companies in Thailand will be prohibited from advertising that they accept cryptocurrency payments and from developing systems, tools, and wallets to assist cryptocurrency transactions.
Businesses found to be in violation of the new crypto regulations may face legal action, which may include the temporary suspension or revocation of services:
“However, the BOT and the SEC, as well as other government organisations, understand the advantages of digital asset technologies such as blockchain and value and encourage the use of technology to further innovation.”
Additionally, the Thai SEC plan wants to strengthen investor protection by regulating the quality of services provided by crypto firms. The SEC’s proposal to digital asset operators is as follows:
“Prepare and send monthly reports on service quality and system capacity usage to the SEC office by the fifth day of the following month.”
Along with monthly reports to the Thai Securities and Exchange Commission, the plan requires crypto firms to publish the reports on their official website within the same timeframe.
The SEC also released a graph highlighting numerous complaints made over the last year including system failure, services that do not match specified requirements, and shopping. According to the statistics, Thai investors had the most difficulties with purchasing, which might be one of the primary reasons for the crypto payment prohibition.
As Cointelegraph previously reported in December 2021, Thailand’s government acknowledged that it is working on developing a new legal framework for the cryptocurrency business by designating “red lines.”
Thailand’s finance ministry allegedly loosened crypto tax laws in the first week of March in an attempt to attract digital asset investments.
According to a report by Cointelegraph, the new tax policy exempts cryptocurrency dealers from paying the 7% value-added tax (VAT) while trading on regulated exchanges. Additionally, the updated tax policy would enable dealers to credit yearly losses against profits on numerous digital assets.