Thailand bans payments through crypto from April 1 as it could jeopardize economic stability
Ban to Protect Financial Stability
The move is consistent with the Thai government’s anti-crypto payment position. The Bank of Thailand has said numerous times that the medium is not legal tender.
The prohibition also comes in response to the SEC’s recent pronouncements that it would look into regulating the usage of tokens in the purchase of goods and services.
Crypto payments, according to the SEC, could jeopardize Thailand’s economic stability.
This approach is most likely prompted by the recent high level of volatility in the crypto market, which makes the medium unsuitable for use as tender.
According to Reuters, businesses that provide crypto payment services have up to 30 days to comply with the guidelines.
The action is in line with the majority of other countries’ treatment of cryptocurrency, which allows it to be used as an investment vehicle but not as legal cash.
Indonesia, a Southeast Asian neighbor, recently issued a warning to financial firms about enabling crypto payments. El Salvador is now the only country that has made cryptocurrency legal tender.
Thailand’s crypto-friendly legislation is still in place
Despite the fact that crypto is not legal tender in Thailand, there are rules in place to encourage its use. The government recently abandoned a planned 15% tax on crypto investments and instead exempted transactions on select crypto exchanges from value-added tax.
The government also permitted traders to deduct annual losses from profits for tax purposes when investing in cryptocurrencies. The moves come as Southeast Asia’s second-largest economy sees a surge in cryptocurrency adoption.
Chainalysis, a cryptocurrency data aggregator, ranks Thailand third in its index of nations driving DeFi adoption in 2021. It is also placed 12th in the worldwide crypto adoption index for 2021, according to the crypto aggregator.