Thailand has issued rules to ban digital assets from being used to pay for goods and services from April 1, the market regulator said on Wednesday.
The move was in line with earlier discussions between the Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) on a need to regulate such activity by digital asset business operators as it could impact the country’s financial stability and overall economy, the SEC said in a statement.
In January, Thai authorities announced a plan to regulate digital asset payments in the country. In the latest announcement, the Thai SEC said that digital assets do not provide improved efficiency to the payments market because of their volatility and high transaction fees.
Last year, many domestic property developers looked to crypto as a way to revitalize interest in the country’s condominium market which is largely geared towards foreigners.
Thai authorities announced in early March that crypto trades on government-approved exchanges will be exempt from a 7% value-added tax (VAT) until 2023.
Thailand, Southeast Asia’s second-largest economy, is also ahead in the game of central bank digital currencies (CBDCs). The country plans to test its retail CBDC later this year as an alternative payment option for the public.
It has also been exploring wholesale CBDC since 2018 under Project Inthanon. The project is currently in its Phase III and is exploring the use of the digital Thai baht in cross-border payments.