The Bank of Thailand is urging local banks to stay away from cryptocurrencies. According to the institution, cryptocurrencies are highly volatile, and financial institutions should not engage in these digital assets.
The Bank of Thailand stated that the risky nature of cryptocurrencies came from their volatility. As such, it stated that the use of Bitcoin and other cryptocurrencies could affect the ability of the financial institution to monitor the economy.
Thailand’s local banks to refrain from crypto
A publication from the Bangkok Post stated that the central bank of Thailand did not want local banks to be directly involved in supporting crypto trading. The bank notes that the use of cryptocurrencies can harm the public that was not well informed about the volatile nature of these assets.
The Senior Director at the Bank of Thailand, Chayawadee Chai-Anant, stated that “We don’t want banks to be directly involved in digital asset trading because banks are responsible for customer deposits and the public, and there is a risk.”
Despite the volatile nature of cryptocurrencies, they have seen growing adoption this year, and they have even been endorsed by leading institutions on Wall Street, such as JPMorgan and Goldman Sachs. The volatility of cryptocurrencies has also been attributed to the fact that these assets are still new in the market and have yet to achieve a high level of adoption.
The Bank of Thailand has given two warnings regarding cryptocurrencies during the past week. Last week, another Senior Director at the Bank of Thailand, Sakkapop Panyanukul, stated that the widespread use of cryptocurrencies would hinder the ability of the financial institution to regulate the country’s financial climate.
Panyanukul further noted that the risky nature of digital assets stemmed from the fact that they did not have any actual use cases, and he even termed them “blank coins.” He noted that digital assets were not backed by any secure assets.
Nevertheless, the institution noted that it was in discussions with other regulatory bodies to regulate the crypto sector.
Thailand urged to adopt crypto
Towards the end of November, the CEO of Bitkub cryptocurrency exchange, Jirayut Srupsrisopa, urged Thailand to adopt cryptocurrencies. He urged Thailand to venture early into digital currencies, which would boost the country’s GDP.
According to Srupsrisopa, adopting cryptocurrencies in Thailand could boost the country’s economy by six times.
The CEO pointed to the reliance of Thailand in its tourism sector. Thailand is one of the most popular tourist locations globally. Tourism accounts for 20% of Thailand’s GDP. However, these numbers were affected by the pandemic.
Moreover, the country also makes for a good destination for investors looking to settle because of its sandy beaches, tropical climate and low cost of living.
The growing use of cryptocurrencies in Thailand has also created a new means for people to generate income. For this reason, the Thailand digital asset sector has created several rich people.
Bitkub’s CEO also urged the Tourism Authority of Thailand (TAT) to move from traditional marketing strategies and attract wealthy crypto investors by endorsing digital assets.
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