Bank of Thailand plans to regulate asset-backed stablecoins this year
After issuing a warning against a Baht-pegged stablecoin produced by a South Korea-based firm, Thailand plans to introduce a series of regulations for stablecoins in 2021.
The Bank of Thailand, or BoT, is upping its game on the stablecoin front. This week, the institution had warned citizens that Thai Baht Digital (THT), a baht-pegged stablecoin issued by the South Korean firm Terra, has no legal assurances or protection and violates the country’s currency act.
According to a report published on March 19, central bank assistant governor Siritida Panomwon Na Ayudhya has told a briefing that the BoT is taking into consideration opinions from market regulators and participants before introducing its measures.
The plans are to regulate asset- and foreign currency-backed stablecoins and algorithmic stablecoins, but not decentralized cryptocurrencies such as Bitcoin (BTC) or Ether (ETH). For these latter, the BoT states that investors can weigh their own risks, according to Siritida.
Regulations for baht-backed stablecoins will reportedly follow a policy roughly in line with measures in Singapore, Japan and the United Kingdom. These would include a requirement to receive official approval from the BoT and their possible classification as e-money. The classification would make them subject to central bank oversight when it comes to money laundering and settlement risks.
Siritida emphasized that the BoT understands the upsides of fintech and innovation and will continue to monitor emerging technologies, while also implementing policies that support the domestic economy and preserve financial systemic stability.
The BoT is meanwhile collaborating with the Hong Kong Monetary Authority, the Central Bank of the United Arab Emirates, and the Digital Currency Institute of the People’s Bank of China on a central bank digital currency prototype using distributed ledger technology. Dubbed the Multiple Central Bank Digital Currency Bridge, or m-CBDC, the project seeks to ease pain points in conducting cross-border transfers.