Thai central bank plans stablescoins regulations this year

[webfact]

FILE PHOTO: Thailand's central bank is seen at the Bank of Thailand in Bangkok, Thailand April 26, 2016. REUTERS/Jorge Silva

By Kitiphong Thaichareon

BANGKOK (Reuters) - Thailand's central bank expects to issue regulations on asset-backed stablecoins this year, an assistant governor said on Friday, after warning against use of a new baht-denominated stablecoin that was created abroad.

"The central bank is receiving opinions from market regulators and participants before announcing regulations, Siritida Panomwon Na Ayudhya told a briefing.

The Bank of Thailand (BOT) will regulate foreign currency-backed stablecoins, asset-backed stablecoins, and algorithmic stablecoins that are not illegal, she said.

The rules will not cover those without asset backing, such as Bitcoin or Ethereum and investors will have to take their own risks, Siritida said.

The move came after the BOT on Wednesday warned against a new baht-denominated stablecoin, THT, which it said could expose users to cyber thief and money laundering.

Siritida said service providers of baht-backed stablecoins would need central bank approval as they may be classified as electronic money (e-Money) and the BOT oversees risks associated with e-Money, such as settlement and money laundering. (https://bit.ly/30ZWFXA)

This policy is in line with guidelines in countries such as Britain, Singapore, and Japan, she said, adding the central bank saw the benefits of fintech and was ready to embrace new innovations.

It is currently in the process of developing a retail central bank digital currency, she said.

The BOT will continue monitoring developments of new technologies and adopt policies that support the economy and can maintain financial system stability, Siritida added.

(Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Martin Petty)

-- © Copyright Reuters 2021-03-19

 

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[ukrules]

2 hours ago, webfact said:

Siritida said service providers of baht-backed stablecoins would need central bank approval as they may be classified as electronic money (e-Money) and the BOT oversees risks associated with e-Money, such as settlement and money laundering.

They need to tread very carefully here because some slightly misworded legislation could disrupt huge numbers of businesses in the country.

Many companies issue some form of 'Baht token', some of them physical in the form of printed vouchers with an amount of Baht on them (gift certificates / discount vouchers from Central, that kind of thing) but most of them are digital in their nature in the form of layalty card point based discounts and 'coins' issued inside games / apps on the internet, etc.

Companies like Shoppee (a foreign company no less) run online game tournaments on games all the time and they award coins to people who play these games and watch certain promotional videos, these coins can be spent as Baht.

The issue is much more complex than it would first appear, banning it would seem simple but I doubt they can do so without affecting the type of systems I mention above.

 

[KannikaP]

10 minutes ago, ukrules said:

They need to tread very carefully here because some slightly misworded legislation could disrupt huge numbers of businesses in the country.

As in the title STABLESCOINS ?

Or is it money used to keep race horses?

[ukrules]

4 minutes ago, KannikaP said:

As in the title STABLESCOINS ?

Or is it money used to keep race horses?

How about paying for things with your mobile phone 'credit' ?

Does that make the phone companies banks? It's the same thing as a virtual Baht really, you make a deposit and can spend it digitally unlike the normal Baht.

Can of worms.....

[chilli42]

The days of all crypto currency not issued by central banks are numbered.  What’s happening in India now is just the thin edge of the wedge.

[Rimbuman]

19 hours ago, chilli42 said:

The days of all crypto currency not issued by central banks are numbered.  What’s happening in India now is just the thin edge of the wedge.

It's rather the opposite in my opinion, this is all unstoppable and non enforceable. 

Again, they are way too late.

[Heng]

Central banks can issue all the digital currency they want.   And I'll happily use them when I want to eat, buy, shop, travel, etc.   I just won't store/save anything significant with them.