The Bank of Thailand (BoT) has issued a warning on Wednesday against Thai Baht Digital (THT), a baht-denominated stablecoin, and asked the public not to make any sort of investment in it.
The central bank raised alarm as it is concerned over the uses of stablecoin in cybertheft and money laundering. The monetary regulator elaborated that there will be no legal assurances or protection offered to stablecoin investors.
Though the warning specifically mentioned the THT stablecoin, it was issued for all Thai baht-denominated digital currencies. The Thai regulator detailed that THT was created outside the country on the Terra Platform. One unit of the THT is denominated in and valued at one baht.
“Although 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,” the BoT noted.
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Stablecoins Are Illegal
Stablecoins became popular as traders wanted to trade digital currencies, but offshore exchanges could not offer crypto-fiat pairs due to regulations. These fiat-denominated cryptos are not volatile like other cryptos and found many uses.
“This would ultimately affect the general public’s confidence in the stability of the national currency system, which is the cornerstone of all economic activities,” the BoT added.
The regulator clearly mentioned that ‘THT is deemed illegal’ as the creation, issuance, usage or circulation of any material or token for money is in violation of the country’s currency act.
While stablecoins remain illegal, the Thai regulator is trying to regulate the overall cryptocurrency industry. The exchanges operating in the country already need to obtain a regulatory license, and now, the regulator is trying to bring other regulations on crypto investors.