Thailand’s central bank is moving towards bringing regulations for the so-called stablecoin as soon as this year, the Bank of Thailand’s Assistant Governor, Siritida Panomwon Na Ayudhya revealed on Friday.
“The central bank is receiving opinions from market regulators and participants before announcing regulations,” she said in a press briefing.
This came after the Thai monetary regulator warned against the usage of a baht-denominated stablecoin called Thai Baht Digital (THT).
Siritida stressed that the upcoming regulations will only cover stablecoins, and not digital currencies like Bitcoin, Ethereum or others. The purview of the framework will not only include Thai baht-backed stablecoins, but also such digital currencies backed by foreign currencies and other assets.
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When the rules will come into effect, Baht-denominated stablecoins will be classified as electronic money (e-Money), and the issuers will need the central bank’s approval.
The Currency System Is under Threat
The Thai regulator first raised its concerns against stablecoins earlier this week while flagging THT, a Baht-denominated digital currency created outside the country. It highlighted that such stablecoins could ‘cause fragmentation to the Thai currency system’ and ‘replace, substitute or compete with Baht issued by the BOT’.
Though there might not be any popular Baht-denominated stablecoin currently in use, many crypto exchanges heavily rely on USD-backed stablecoins like Tether. These stablecoins help offshore exchanges to bypass regulations needed for service with fiats, providing a similar trading experience.
Furthermore, Siritida pointed out that the proposed regulations are similar to existing regulations that are already in place in Britain, Singapore and Japan.