The Bank of Thailand (BOT) has passed a new circular that is allowing the banks and financial institutions to invest, issue, and sell cryptocurrencies through subsidiaries while the previous directive by the central bank to not deal in cryptos is still in effect.
Thailand’s central bank, BOT takes a progressive step towards crypto
The Bank of Thailand (BOT), the central bank of the country has released a new circular that in essence bypasses its original circular where it banned the local banks from dealing in cryptocurrencies.
According to these reportedly latest regulations, the Bank of Thailand is still prohibiting financial institutions from engaging in bitcoin and other cryptocurrencies. The existing regulation on cryptos is still in effect. However, the central bank is now allowing the banks and financial institutions to invest in cryptocurrencies through subsidiaries.
As per this mandate, the subsidiaries in the financial sector can do business with digital tokens, and those that are involved in digital assets, provide a digital token offering system and invest in digital assets.
The rough translation of the document suggests that these institutions can engage in these activities from now on immediately or ask for permission from the central bank. However, the bank doesn’t allow them to make any transactions for the customers.
Subsidiaries now allowed to invest in cryptos
The doors to the crypto world have been opened for the banks and financial institutions. Basically, they can be ICO issuers, ICO portal, invest in cryptocurrency, and engage in related businesses like a broker, dealer, and exchanges.
But these financial institutions and banks can’t get involved directly, rather can only offer or recommend investment advice sources. If these banks want to invest in digital assets say issue an ICO with the objective of contributing towards financial innovation, they can do so through a regulatory sandbox.
However, the use of credit cards or such to make the purchase is prohibited. And the financial risk management measures need to have strictly adhered. This official letter by Bank of Thailand is apparently sent to the executive of every financial institution in Thailand.
In February this year, the banks were prohibited from offering crypto exchanges, create crypto trading platforms and invest or trade in cryptocurrency as directed by the central bank governor of Thailand, Veerathai Santiprabhob in the previous circular.
This has made the people in the Reddit community bullish in general and for OmiseGo (OMG) cryptocurrency in particular as one Redditor explains, “It’s a Thailand-based project with ties to Thailand government/banks.”
Though the Bank of Thailand hasn’t outrightly upended the ban, this potential step forward is a progressive one that is good for the crypto community along with the country in boosting their financial and economic sector.