Thailand will restrict the role of its commercial banks in crypto to protect them from unforeseen risk, the central bank said.
The Bank of Thailand said banks should limit their investment in digital-assets businesses, including crypto exchanges, to 3% of their capital.
And any investment made in the industry should be through units to shield the confidence of depositors and the banking system, it said.
“We will use regulatory measures to ring-fence the banks by allowing only units to invest in digital assets,” the Bank of Thailand’s (BoT) assistant governor Roong Mallikamas told Bloomberg.
The BoT wants the banks to be gradually exposed to the sector through quality products, instead of “going into it at full-speed on fears of falling behind,” the official added.
The Securities and Exchange Commission (SEC) and the BoT have raised concerns around potential crypto risks in the past.
BoT’s assistant governor said that a cautious approach in the fintech space has worked in Thailand’s favor in the past. Essentially because the watchdog can supervise the risks associated with such investments.
Thailand’s approach differs from its Asian neighbors like Indonesia and Singapore. In Jan, Indonesia’s Financial Services Authority (OJK) prohibited financial firms from offering crypto assets. While Singapore, which is already a popular crypto hub, is against promoting crypto services to the general public.
Thailand to issue digital guidelines by June
Thailand is planning to release more guidelines for digital banks by June. However, it is yet to be seen if Thailand will take the Singapore route and hand out more licenses to both domestic and foreign crypto players.
Meanwhile, Finance Minister Arkhom Termpittayapaisith agreed that while the sector offers potential, the government will look to regulate it to ensure orderly growth.
The popularity of crypto assets, especially among youths looking to make better returns during the country’s economic slowdown, has driven banks such as Siam Commercial Bank and Kasikornbank to make investments in digital asset platforms.
Siam Commercial, which agreed to buy a majority stake in Bitkub Online for more than $500 million in November, has yet to win regulatory approvals.
Disclaimer
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
