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Binance Backs Thai Bitcoin Dreams – But There’s a Catch!

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  • Former Thai PM Thaksin Shinawatra proposes Bitcoin payments, with Binance offering support while emphasizing the need for careful risk assessment.
  • Binance advocates for sandbox approach to test crypto payments, allowing regulatory monitoring while businesses gain practical experience.
  • Despite crypto restrictions in Thailand, Binance successfully established operations through Gulf Energy partnership, becoming Southeast Asia’s first licensed exchange.

Former Thai Prime Minister Thaksin Shinawatra has voiced support for implementing Bitcoin payments. Binance, the world’s leading cryptocurrency platform, has welcomed this proposal while emphasizing that the Bank of Thailand must conduct thorough risk assessments before any implementation. 

According to local reports, Binance believes the initiative would boost Thailand’s competitiveness and attract tech-savvy tourists. Nirun Fuwattananukul, CEO of Gulf Binance, echoed this sentiment, praising Thaksin’s suggestion as a positive step for the digital asset industry.

It reflects the momentum of global crypto adoption and demonstrates that leaders at the highest level are embracing these transformative technologies. As more countries adopt digital assets and cryptocurrencies, Thailand must not be left behind.

Bitcoin
Binance Backs Thai Bitcoin Dreams - But There's a Catch! 2

Meanwhile, Binance has cautiously welcomed the move, underscoring the critical need for banks to assess the potential risks associated with Bitcoin payments. This includes volatility, security concerns, and regulatory challenges.

To mitigate these risks, the exchange advocates for a sandbox approach that allows for close monitoring and assessment by regulatory authorities while providing businesses and consumers with practical experience.

Additionally, the proposed initiative will require careful consideration of currency controls, capital flows, and monetary policy. This would thus entail close collaboration between various stakeholders, especially between the Bank of Thailand and the SEC. Key considerations include consumer protection, anti-money laundering measures, and maintaining financial stability.  

Thailand’s Bitcoin Dilemma

While Bitcoin payments are gaining traction in countries like the US and Japan, Thailand operates under a restricted currency system. The Bank of Thailand currently prohibits the use of Bitcoin and other cryptocurrencies for payments.

Binance TH, a subsidiary of Gulf Binance, received the green light from Thailand’s SEC to operate a crypto exchange and brokerage in 2022. At the time, it became the first crypto exchange to secure a permit in Southeast Asia, thanks to the partnership with Gulf Energy Development, one of Thailand’s largest private power producers.

The exchange began its operation in Thailand in the fourth quarter of 2023 as a 51-49 joint venture with Gulf Innova, the fintech arm of Gulf Energy, which invested $20 million for a 0.4% stake in Binance’s U.S. operation. 

Bank Of Thailand Publishes Guidelines On CBDC Shortly After Warning Its Citizens

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Central Bank Digital Currencies, or as popularly known as CBDC, is the talk among central banks across the world. Riding the wave of a massive digital revolution, CBDCs offer risk-free, that is backed by the country’s central bank money denominated in cash. The latest country to jump the bandwagon is Thailand.

The Southeast Asian country published guidance outlining its views on central bank digital currencies [CBDC]. The Bank of Thailand [BOT] categorized stablecoins into two groups – one that is backed by the country’s currency, the baht, and other forms of stablecoins.

Thailand’s CBDC:

The guidance revealed that BOT is currently in the process of developing a retail central bank digital currency [CBDC] to accommodate the demands of the general public, enhance service efficiency in the business sector, as well as increase access to financial services. It further stated,

“The BOT will continue to closely monitor the developments of new technologies, taking into account the benefits and related risks in the effort to adopt policies supportive of promoting ongoing economic development while maintaining financial system stability.”

According to BOT, Baht-backed stablecoins are cryptocurrencies that are essentially designed to reduce volatility by pegging its value to the Baht. These are used as a means of payment. The guidelines mentioned that such stablecoins may be designated as electronic money [e-Money] under Thailand’s Payment Systems Act 2017.

While acknowledging that the bank oversees risks associated with e-Money, like in cases of settlement, money laundering cybersecurity, and consumer protection risks, BOT stated that the service providers of Baht-backed stablecoins are required to consult with it for consideration before starting any operations.

The Other Kind:

With regards to the ‘other forms of stablecoins” that include foreign currency-backed, asset-backed, and algorithmic stablecoins., BOT maintained that they are not illegal. The bank also welcomed dialogues and said that it is “open to receive comments and feedback before considering regulatory guidelines as appropriate”.

The latest development comes shortly after Thailand reportedly alerted its citizens against privately-issued stablecoin.

Previously in June 2020, Bank of Thailand had announced a partnership with The Hong Kong Monetary Authority, for the development of a prototype for a cross-border blockchain payment system known as “Project Inthanon-LionRock“.