Many might be familiar with the United States Securities and Exchange Commission (SEC), but Thailand has a similar official body. The Thai SEC announced on Wednesday it will ban crypto payments going forward from April 1st, therefore making this commission cracking down slightly harder on crypto than their American counterparts.
Ban on transactions only
The reasons the SEC wants to ban this is interesting. The regulator is afraid that people will launder money via crypto, and the organization fears that the banks cannot intervene sufficiently, or not at all. The latter is one of the reasons crypto exists, but the Thai SEC sees threats in it rather than solutions.
The Thai SEC emphasized that this is not a ban on crypto itself, but only a ban on the use of crypto for payments. The country already said in January that crypto regulation was lurking. Thailand said it would "take into account feedback from concerned stakeholders and the general public." The latter doesn't seem logical if they were to ask the crypto community.
Additionally, Thailand looks to reduce the tax burden on crypto on exchanges. This was a positive development, but this is now getting a weird tail with this ban. However, tax will still be reduced from the same date the transaction ban takes effect.
Will the ban be lifted in the future?
There is one big reason why this ban on crypto payments may go away in the future. The country is in the process of creating its own Central Bank Digital Currency (CBDC). Thailand's central bank released a preliminary report detailing this strategy in April last year.
In short: a private CBDC should ensure “monetary sovereignty and financial stability.” But if a country has a ban on crypto payments, what good is its own digital currency?
The result seems logical: shutting down other crypto transactions outside CBDCs – until the country has a crypto of its own. Perhaps this will come in the form of a crypto transaction monopoly. In the report, Thailand mainly mentions negative things about cryptocurrencies, while it sees opportunities in stablecoins. This would be strange on one hand, as the country also advocates "fair competition."