Thailand to Protect Commercial Banks from ‘Unexpected’ Crypto Risks
Thailand will limit the role of its commercial banks in crypto to protect them from unforeseen risks, the central bank has said.
The Bank of Thailand said banks should limit their investments in digital asset businesses, including crypto exchanges, to 3% of their capital.
And any investment made in the industry should be through units to protect the confidence of depositors and the banking system, he said.
“We will use regulatory measures to protect banks by only allowing units to invest in digital assets,” said Bank of Thailand (BoT) Deputy Governor Roong Mallikamas. Recount Bloomberg.
The BoT wants banks to gradually expose themselves to the sector through quality products, instead of “rushing into it for fear of falling behind”, the official added.
The Securities and Exchange Commission (SEC) and the BoT have raised concerns about potential crypto risks in the past.
BoT’s deputy governor said a cautious approach in the fintech space had worked in Thailand’s favor in the past. Mainly because the watchdog can oversee the risks associated with such investments.
Thailand’s approach differs from its Asian neighbors like Indonesia and Singapore. In January, the Indonesian Financial Services Authority (OJK) prohibited financial companies to offer crypto assets. While Singapore, which is already a popular crypto hub, is against promoting crypto services to the general public.
Thailand to issue digital guidelines by June
Thailand plans to issue more guidelines for digital banks by June. However, it remains to be seen whether Thailand will go the Singapore route and hand out more licenses to domestic and foreign crypto players.
Meanwhile, Finance Minister Arkhom Termpittayapaisith agreed that while the sector offers potential, the government will seek to regulate it to ensure orderly growth.
The popularity of crypto assets, especially among young people seeking better returns during the country’s economic downturn, has prompted banks such as Siam Commercial Bank and Kasikornbank to invest in digital asset platforms.
Siam Commercial, which agreed to buy a majority stake in Bitkub Online for more than $500 million in November, has yet to secure regulatory approvals.
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