Central Bank of Thailand asks banks to avoid cryptocurrencies, pending rules review

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The central bank published a circular Monday, which prohibits banks in Thailand from investing and trading in cryptocurrencies, as well as participating in and creating exchanges and platforms for crypto trading. The circular applies specifically to banks, not to exchanges or other services that are still allowed to work freely in the country.

Banks were also asked not to advise clients about crypto investment or trading, and also prohibit customers from using credit cards to crypto purchase. Several large banks around the world have already established a similar ban on the purchase of crypto credit cards last week, as the crypto markets plunged into new multi-month record lows.

Explaining their arguments in favor of the ban on the activity of banks in cryptocurrencies, the Bank of Thailand called concerns about the use of digital currencies for illegal activities, such as money laundering or terrorist activities, and noted that cryptocurrency transactions are not legal tender in the country.

Apisak Tantivorawong, Thai Finance Minister said on February 7 that the Thai government will not prohibit cryptocurrency trading, but will work to create a regulatory framework for digital currencies, the Bangkok Post reported. The Bank of Thailand circular can be viewed as warning banks from digital currencies until this regulatory framework can be implemented.

Thailand's Ministry of Finance said on February 2 that the Bank of Thailand and the SEC of Thailand should warn customers about investing in crypto markets, but Blockchain technology can be useful for Thailand's financial sector.

The Central Bank of Thailand had previously held a meeting with Ethereum co-founder Vitalik Buterin in August 2017 about the future possibility of Ethereum integration into the Thai financial sector to improve the efficiency of the existing infrastructure.