Bank of Thailand concerned with banks trading in digital assets

The Bank of Thailand said they don’t want commercial banks to directly trade in cryptocurrency and digital assets due to their extreme volatility. Thai lenders have been investing more and more in digital asset exchanges in Thailand with several banks making deals in the digital currency space.

Siam Commerical Bank recently purchased a 51% share of Bitkub for 17.85 billion baht, Thailand’s most successful digital exchange that has captured a staggering 92% of all licensed trading turnover, over 1 trillion baht in 2021. And Bank of Audhya was involved in a 1.37 billion baht investment in Zipmex, another digital exchange.

But the Bank of Thailand says that banks are responsible for customers’ money and deposits and doesn’t want to see those intermingled with the wild market swings of cryptocurrencies and digital assets, instead preferring more stable assets like Stocks, Fixed Income or Forex Trading. The senior director of the BoT said that dealing in crypto is different from a bank being a shareholder in a digital exchange though like SCB and Audhya are.

There are 8 cryptocurrency exchanges that are licensed to operate in Thailand and they have moved about 205 billion baht in digital asset transactions in November alone according to the Security and Exchange Commission. And while the central bank has been warning companies against accepting crypto as payment, digital assets have been growing and growing in popularity and retail shops, real estate developers and other businesses have begun accepting crypto payments more and more.

The Bank of Thailand warns though that once crypto is in widespread use, they will no longer have a strong grasp on the economy with the senior director saying that currencies that aren’t backed by any assets pose a particular threat.

“If other currencies are widely used, it will impact the central bank’s ability to oversee the economy. For digital assets, we are not afraid of everything, but there is a spectrum – most worrying are blank coins.”

SOURCE: Reuters