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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“.

Thailand Alerts Citizens Against Privately Issued Stablecoin

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The emergence of digital assets proved to have its own set of pros and cons. Thailand’s Central Bank seems to be fending off any possible cons that could put its citizens at risk.

Those who detested or feared the volatile nature of cryptocurrencies decided to cling onto stablecoins. While the crypto-verse has been encountering a lot of scammy projects, the stablecoin market did not fall behind. Thailand’s latest announcement revealed that stablecoins that are privately issued could be harboring potential money laundering or cybercrime hazards.

Thailand Central Bank Labels Activities Pertaining To Stablecoin, “Illegal”

In a recent article published by the Bangkok Post, it was revealed that any activity related to stablecoins pegged to the Thai Baht, including trading and holding the assets would be considered illegal. The Bank of Thailand further pointed out that the Thai Baht Digital [THT] wasn’t under the legal purview of the government. This could further pave the way to easy money laundering and other cybercrime actions.

The Bank of Thailand’s assistant governor of the legal group, Pruettipong Srimachand, suggested that creating, issuing as well as circulating or using any material or token for cash would be causing the breach of Section 9 of the Currency Act 1958.

Srimachand further added,

“Such usage would ultimately affect the general public’s confidence in the stability of the national currency system, which is the cornerstone of all economic activities.”

Anti-money laundering laws along with strict KYC processes have become a must for every crypto platform. With perpetrators trying to garner easy money through scammy projects, the governments are trying to protect their citizens.

The increase in the popularity of crypto forced several countries to bring in more stringent laws to govern the crypto-verse. The Thai government also jumped onto the bandwagon and began licensing cryptocurrency platforms. The Asian country has licensed over 13 crypto firms to operate in the region. Prominent platforms like Bitkub, Huobi Thailand, BX, and several others managed to score approval from the Thailand Securities and Exchange Commission.

Huobi Boosts its Thailand Presence By Getting Thai Baht Trade Approval

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Several countries around the globe have started to step into the cryptocurrency world, or at least into the blockchain industry. This development has also been made on the Asian shores and the countries in the region have taken a serious turn towards it.

Thailand has been the latest country to open its doors to cryptocurrency business with Huobi Thailand to receive a license from the Thai Ministry of Finance for trading in Baht.

The Huobi Cloud-powered company reported that a government license would allow it to conduct transactions in the country’s premises. Using the new platform the holders will be able to trade with BTC, ETH, HT, and USDT using the currency of the region, the Thai Baht.

At the moment, the platform gives customers the option to facilitate digital transactions across sectors. The HT token is Huobi’s native cryptocurrency and the latest development is set to give it a new benchmark.

Huobi has told users that it will add streamlined processes to its platform while at the same time allowing direct swaps with the Baht. The platform aims to act as a bridge between crypto and fiat in order to increase the number of adoptions in Thailand.

The organization added that it will be adding assets such as XRP, Bitcoin Cash, Litecoin and Bitcoin SV soon. Officials close to the company claimed that worldwide easy transaction was the key and that Huobi wanted an interconnected finance sector.

The company had also stepped up to help Coronavirus victims by donating 10 million yuan for medicine and help. According to reports, Huobi will continue to invest more in infected areas all around China. Amid all these updates, Huobi’s native token HT has achieved a new 12-month high due to an increase in exchange trading volume. Huobi added that it will also be boosting privacy features across the board because of the increased scrutiny from regulators.

It was just last year when Huobi Thailand obtained the Digital Asset License from the Thai Ministry of Finance. With permission from the country’s Securities and Exchange Commission, Huobi has been able to connect with the country’s payment network. The Thai Baht integration was a way to expand the usage circle of the Huobi token. Huobi Token was last in the news when it got listed on a popular hotel booking site, Travala.com.

Huobi Thailand’s plans to launch a stablecoin has also been a known fact in the crypto-verse. The stablecoin coin will be pegged at a 1:1 ration with the Thai Baht. Stablecoin launches were becoming increasingly popular in the industry and it is only a matter of time before other companies follow suit.

Ciara Sun, the Vice President of Global Business at Huobi Group further said that they wanted to uplift the economy by broadening access.  The exchange’s release came right before Bitcoin crashed below the $8000 mark. The entire cryptocurrency market awoke to a shock when the world’s largest cryptocurrency fell by 9.1 percent. Altcoins such as Ethereum, XRP and Bitcoin Cash fell by double-digit figures at the same time.