Thailandâ€™s central bank has declared a stablecoin pegged to the Thai Baht illegal, citing violation of the countryâ€™s currency law. The Bank of Thailand (BOT) is currently working on a regulatory framework for stablecoins.
Thailand Bans Baht-Pegged Stablecoin
â€œIt has come to the BOTâ€™s attention that a new stablecoin, THT, has been created abroad on the Terra platform. One unit of THT is denominated in and valued at one Thai baht,â€ the announcement describes.
The central bank claims that â€œAlthough THT is currently not used as a medium of exchange, it could cause fragmentation to the Thai currency system should THT or other similar stablecoins come to replace, substitute or compete with baht issued by the BOT,â€ asserting:
Following the announcement regarding the stablecoin THT, the Bank of Thailand said that it expects to issue regulations on stablecoins this year, Reuters reported Friday, citing a BOT assistant governor, Siritida Panomwon Na Ayudhya.
The central bank â€œwill regulate foreign currency-backed stablecoins, asset-backed stablecoins, and algorithmic stablecoins that are not illegal,â€ the assistant governor revealed, noting that this regulation will not cover cryptocurrencies such as bitcoin and ether.
She further explained that under the new regulation, â€œservice providers of baht-backed stablecoins would need central bank approval as they may be classified as electronic money (e-money) and the BOT oversees risks associated with e-money, such as settlement and money laundering.â€
What do you think about the Thai central bank declaring the stablecoin illegal? Let us know in the comments section below.
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