Banks Can Open cryptocurrency dealings Subsidiaries, According to the Bank of ThailandAugust 20, 2018
Recently, the Bank of Thailand (BoT) gave local banks the permission to set up subsidiaries to be used for cryptocurrency dealings. This is according to a report on August 3 by Blognone, local Thai source. On August 1, BoT published a regulatory announcement.
According to the announcement, local Thai banks are now allowed to offer crypto brokerage services, produce digital tokens, capitalize in cryptocurrencies, and operate crypto-related businesses. They can do all these through subsidiaries.
However, this announcement also reaffirmed that all of Thailand’s banks and financial institutions remain banned from direct cryptocurrency dealings. The banks can now establish their crypto-dealing branches. However, those branches cannot offer crypto-related services to the public and its customers.
They can only operate and interact with other crypto services approved by the Securities and Exchange Commission (SEC) and Office of Insurance Commission (OIC) of Thailand. In addition, the branches cannot offer investment resources to customers.
That is unless it will be as investments in digital assets meant to expand the financial services’ quality or improve financial innovation. In that case, they will have to utilize the BoT Regulatory Sandbox. Early this year, the Bank of Thailand released a circular regarding the prohibition of banks in Thailand to invest and trade in crypto.
Along with that, local banks are also aren’t allowed to start crypto exchanges. This is even though the country legalized the operation of crypto exchanges in the country. Besides the aforementioned prohibitions, the Thailand central banks require the banks not to offer crypto trading and investment advice.
Similarly, customers are banned to have crypto purchases using credit cards. The Thai government gave out a regulatory framework. According to the framework, cryptocurrencies are “digital assets and digital tokens.” This also puts crypto to be regulated by the Thai SEC.
Back in June, the Bank of Thailand let the people know that it is seeing providing a new way to conduct interbank settlement. This new way would make use of a central bank-issued digital currency (CBDC). With this, the bank adopts its very own crypto and that would reduce significantly cut the transaction costs along with the validation and transaction time.
This is all because then there won’t be a need for longer intermediation process than the existing systems. Following this changes, the Thai government passed regulations regarding Initial Coin Offerings (ICO) in July. The regulations make Thailand one of the first jurisdictions allowing the operation of ICOS in a fully-regulated environment in the world.