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Bank of Thailand to Regulate Stablecoins
PAR002_123 • Mar 22, 2021
The Bank of Thailand (BOT) is set to draft stablecoins regulations by the end of 2021
This latest development was revealed by the Central Bank’s assistant governor, Siritida Panomwon Na Ayudhya. Siritida said in a briefing that the bank was in talks with market regulators and participants before concluding stablecoin regulations.
The announcement said,
“It has come to the BOT’s attention that a new stablecoin, THT, has been created abroad on the Terra platform. One unit of THT is denominated in and valued at one Thai baht,”
The central bank governor claimed,
“Although THT is currently not used as a medium of exchange, it could cause fragmentation to the Thai currency system should THT or other similar stablecoins come to replace, substitute or compete with baht issued by the BOT,”
The Thai regulator first raised its concerns against stablecoins earlier this week while flagging THT, a Baht-denominated digital currency created outside the country. It highlighted that such stablecoins could ‘cause fragmentation to the Thai currency system’ and ‘replace, substitute or compete with Baht.
they asserted,
"This would ultimately affect the general public’s confidence in the stability of the national currency system, which is the cornerstone of all economic activities. Therefore, any activity involving THT is deemed illegal, as the creation, issuance, usage or circulation of any material or token for money is a violation of Section 9 of the Currency Act 1958."
Siritida stressed that the upcoming regulations will only cover stablecoins, and not digital currencies like Bitcoin, Ethereum or others. The purview of the framework will not only include Thai baht-backed stablecoins, but also such digital currencies backed by foreign currencies and other assets.
When the rules will come into effect, issuers of Baht-denominated stablecoins will be required to get a central bank license as they
will be classified as electronic money. The central bank will also oversee risks associated with e-money which includes money laundering and illegal funding. Siritida pointed out that the proposed regulations are similar to existing regulations that are already in place in Britain, Singapore and Japan.
In its most recent move, the bank joined forces with China, Hong Kong and the UAE in CBDC research.
Source:
BOT Press Release No. 16/2021 - Stablecoins Regulation Policy
https://www.bot.or.th/English/PressandSpeeches/Press/2021/Pages/n1664.aspx
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