Breaking: Thailand Bans Payments Through Crypto

Thailand’s Securities and Exchange Commission (SEC) on Wednesday issued orders banning the use of digital assets in payments for goods and services. The ban will be effective from April 1.

The move is in line with the Thai Government’s stance against crypto payments. The Bank of Thailand has repeatedly insisted that it does not support the medium as legal tender. The ban also comes as a follow-up to recent comments from the SEC that it would look into regulating the use of  tokens in purchasing goods and services.

Ban to protect financial stability in Thailand

The SEC said crypto payments could dent Thailand’s economic stability. This stance is likely motivated by the large amount of volatility seen in the crypto market recently, which makes the medium somewhat unfeasible for use as tender.

Businesses that provide crypto payment services have up to 30 days to comply with the rules, Reuters reported. The move is in line with most other countries’ approach to crypto, where it is approved as an investment vehicle, but not as legal tender.

Recently, Southeast Asian peer Indonesia also warned financial firms against facilitating crypto payments.  To date, El Salvador is the only country that has adopted crypto as legal tender.

Thailand still has crypto-friendly regulation

Even with a ban on crypto as legal tender, the Thai Government still has laws to promote the use of crypto. Recently, the government scrapped a planned 15% tax on crypto investments, and instead exempted value-added-tax from transactions on certain crypto exchanges.

The government also allowed traders to offset annual losses against gains for taxes due on cryptocurrency investments. The moves come following a surge in crypto adoption in Southeast Asia’s second-largest economy.

Crypto data aggregator Chainalysis ranked Thailand as third in its index of countries leading DeFi adoption in 2021. It is also ranked 12th in the crypto aggregator’s 2021 global crypto adoption index.