Bank of Thailand to impose strict laws on Stablecoins in a bid to tighten regulation this year
March 20, 2021 6:05 PM
Bank of Thailand is already setting the tone for strict regulation of stablecoin this year, after warning on a Thai baht Digital (THT), a baht pegged stablecoin issued by Terra, which has no legal assurance or protection and violates Thai currency act.
In just a few weeks after the Bank of Thailand or BoT warned its citizens of a stable coin developed by Terra a South Korean company. The regulators revealed plans to establish a series of regulations for stablecoins in 2021.
According to Friday report, the central bank Assistant Governor Siritida Panomwom Na Ayudhya said that the bank of Thailand is considering opinions from market regulators and participants before initiating new laws on stablecoins.
Siritida said the plans are to regulate asset-backed, foreign currency backed and algorithmic stablecoins. Although the assistant central bank Governor asserted that decentralized cryptocurrencies such as Bitcoin or Ethereum won't be regulated as they said investors can always weigh their risk.
The regulations for stablecoins pegged to baht could follow same policy as Singapore, UK and Japan. This implies that the BoT official approval and their possible classification as e-money is needed before being issued. The classification would enable BoT to keep track of transactions in case of money laundering and settlement risk.
Siritida undelined that the BoT understands the advantages of fintech and innovation and is set to keep track of emerging technologies, while also enforcing laws that supports the domestic economy.
However, the BoT is joining forces with the Hong Kong Monetary Authority, Central Bank of UAE and the Digital Currency Institute of the peoples Bank of China on developing a CBDC using distributed ledger technology.