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Thai Central Bank Declares Baht-Pegged Stablecoin Violates Currency Law

The central bank of Thailand, known as the Bank of Thailand (BOT), issued a press release this week in which it declared the stablecoin Thai Baht Digital (THT) illegal.

“It has come to the BOT’s attention that a new stablecoin, THT, has been created abroad on the Terra platform. One unit of THT is denominated in and valued at one Thai baht,” the announcement reads.

The central bank alleges that “Although THT is currently not used as a medium of exchange, it could cause fragmentation to the Thai currency system should THT or other similar stablecoins come to replace, substitute or compete with baht issued by the BOT,” declaring:

“This would ultimately affect the general public’s confidence in the stability of the national currency system, which is the cornerstone of all economic activities. Therefore, any activity involving THT is deemed illegal, as the creation, issuance, usage or circulation of any material or token for money is a violation of Section 9 of the Currency Act 1958.”

Furthermore, the Bank of Thailand has declared that it plans to issue regulations for stablecoins sometime in 2021, according to Siritida Panomwon Na Ayudhya, the assistant governor of the Bank of Thailand.

The assistant governor declared that the bank “will regulate foreign currency-backed stablecoins, asset-backed stablecoins, and algorithmic stablecoins that are not illegal.” She also mentioned that this set of regulations wouldn’t cover cryptos such as Bitcoin or Ether.

She also mentioned that under these new regulations, “service providers of baht-backed stablecoins would need central bank approval as they may be classified as electronic money (e-money) and the BOT oversees risks associated with e-money, such as settlement and money laundering.”

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