Bangkok, 23 March 2022 – The Securities and Exchange Commission (SEC) has issued regulations governing the provision of services of digital asset business operators to avert support or promotion of the use of digital assets as a means of payment for goods and services. This is to prevent potential impacts on the country’s financial system and economy. In this regard, the Bank of Thailand (BOT) and the SEC have discussed and considered it necessary to regulate the matter. The existing digital asset business operators are required to comply with the regulations within 30 days as from 1 April 2022.
The BOT and the SEC previously discussed and reviewed the benefits and risks of digital assets and deemed it necessary to regulate and control the use of digital assets as a means of payment for goods and services to avert potential impacts on the country’s financial system stability and the overall economy as well as potential risks toward the public and business sectors. For example, risk on loss due to price volatility, cybersecurity risk, risk on personal data leakage, and exploitation as a money laundering tool.
The SEC Board has therefore considered exercising authority within the scope of relevant laws to prohibit digital asset business operators from using digital assets as a means of payment for goods and services which may lead to a widespread use of digital assets beyond the investment purpose. The SEC Board Meeting No. 3/2565 dated 3 March 2022 passed a resolution approving the principles for prohibiting digital asset business operators from using digital assets as a means of payment for goods and services. In laying out the principles to be more appropriate, the SEC took into consideration the comments and suggestions given by stakeholders at a public hearing (during 25 January – 8 February 2022), which resulted in the issuance of regulations governing the provision of services of digital asset business operators. Essentially, the regulations contain the following provisions:
(1) Digital asset business operators of all types are prohibited from providing services or acting in any manners of supporting or promoting the use of digital assets as a means of payment for goods and services, which include advertising, soliciting or presenting oneself as ready to provide payment services to shops or establishing a system or a tool for facilitating payment of goods and services, or opening a digital wallet for the purpose of using digital assets as a means of payment for goods and services, etc.;
(2) In the case where a digital asset business operator finds that a client uses the account opened for the purpose of trading digital assets as a means of payment for goods and services, the digital asset business operator is required to issue a warning regarding the misuse of the account for the wrong purpose in contrary to the terms of service, and take action on the client who fails to comply with the terms of service, which shall include temporary suspension or termination of service or any other actions in similar manners.
The regulations in this matter will become effective as from 1 April 2022. Digital asset business operators who have already provided services under (1) and (2) are required to comply with the regulations within 30 days as from the effective date.
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