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The Securities and Exchange Commission Regulates the Control over the use of a Digital Asset as a Means of Payment in Thailand

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Headline: “The Securities and Exchange Commission (“SEC”) has set a new regulation to control services rendered by a digital asset business operator in Thailand, in order to limit the use of a digital asset as a means of payment for services and goods, as a preventive measure for the financial stability and economy of Thailand. A joint discussion between the SEC and Bank of Thailand (“BOT”) concluded that there is a necessity for such control. Consequently, , a digital asset business operator that had provided services in support of digital assets used as a means of payment shall comply with this newly launched regulation within 30 days from 1 April 2022.”

Using digital assets as a means of payment for services and goods in this real world is still prohibited as per the discussion between the BOT” and the SEC. However, such prohibition with regard to the means of payment is a restriction in the Thai market only for the sale and purchase of products and services at present. The SEC and BOT foresaw the potential risks of using digital assets as a means of payment in that it could hugely affect the overall financial stability of Thailand as a whole, as well as Thai businesses and Thai people, such as the risk of a valuation loss from a market crash or high fluctuation; cyber security crime; personal data leakage; and as a victim of money laundering. A resolution was passed by the SEC’s board meeting no. 3/2565 (2022) dated 3 March 2022 (“Resolution”); the main points of which were as follows:
 

  1. Digital asset business operators of all types are prohibited from providing services which are likely to support or facilitate the use of digital assets as the means of payment,  including but not limited to the following:
     
  • Advertisements;
  • Persuasion or declaration to render services facilitating the means of payment or services to the shops for supporting the MOP;
  • Facilitation of a system or supporting devices for the means of payment for services and goods; and
  • Digital asset wallet set up purposely to facilitate the collection of the digital assets to be used as the means of payment in the Thai market.
  1. In the event that a digital asset business operator finds that its customers use their digital assets in collecting in the Digital Asset Exchange’s account to utilize as the MOP of their services and goods, such operator shall notify its customers of such use of digital assets which contradict the terms and conditions, as well as the objective of the digital asset business operator’s services itself. In addition, said operator shall also implement any measure or punishment deemed necessary to customers who perform any suspension of service, cancellation of service or any similar ways of execution thereupon.

Further to said regulation that has just been put into effect, the SEC also published clarification on Question and Answer (Q&A) Part which is the annex to the Resolution for the implementation of a prohibition on the use of digital assets as the means of payment; by stating detailed reasons and guidance, or potential trends of digital assets supported by public sectors in terms of future regulations and control.

Reference: https://www.sec.or.th/TH/Pages/News_Detail.aspx?SECID=9353

 

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or any other areas of law, please contact:           

Nuttaros Tangprasitti 
Partner 

Natrada Ruangwuttitikul
Attorney-at-Law

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