Thai Central Bank Declares Baht-Pegged Stablecoin Illegal in Violation of Currency Law

Thailand’s central bank has declared the cradle attached to the Thai baht illegal, for violating the country’s currency laws. The Bank of Thailand (BoT) is currently working on a regulatory framework for stables.

Thailand Ban Baht Corner Stables

The Bank of Thailand, the country’s central bank, issued a press release Wednesday declaring a stable called Thai Baht Digital (THT) illegal.

It was noted that a new THT stable has been created abroad on the Terra platform. One unit of TNT will be expressed and valued at one Thai baht, the announcement said.

Although the THT is not currently used as a medium of exchange, according to the central bank, it could lead to a fragmentation of Thailand’s monetary system if the THT or similar stables replaced, supplanted or competed with the BOT-issued baht:

This will ultimately affect public confidence in the stability of the national monetary system, which is the cornerstone of all economic activity. Therefore, any activity related to TLTs is considered illegal as the creation, issue, use or circulation of any material or token in exchange for money is contrary to Section 9 of the Currency Act 1958.

After announcing its entry into the confectionery market, the Bank of Thailand plans to issue regulations for confectionery products this year, Reuters reported on Friday based on Siritida Panomwon Na Ayudhya, deputy governor of the BOT.

The central bank will regulate currency boxes, asset-backed boxes and algorithmic boxes that are not illegal, the deputy governor said, noting that regulation will not extend to cryptocurrencies like bitcoin and Ether.

She further explained that under the new rule, service providers related to stalls on a baht basis would have to get approval from the central bank, as they may qualify as electronic money (e-money) and the EPA is tasked with monitoring risks related to e-money, such as settlement and money laundering.

What do you think of the fact that the Central Bank of Thailand has declared the stable illegal? Let us know your comments in the section below.

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