Bitcoin gets government support in Thailand

According to the local Thai report, the Bank of Thailand has taken a far-reaching step regarding the fate of Bitcoin in the country. It has permitted local banks in the country to set up affiliates or branches. This measure will in turn, help these local banks in dealing with the changing nature of crypto currency markets.

How this announcement benefits the local banks:

As the announcement is made official on 1st august the local banks gets acquainted with flourishing benefits. These include:

  • Their right to issue digital tokens
  • By using Bitcoin, they can provide brokerage services to the clientele of investors who are involved in the trading of Thailand stocks and other securities.
  • The banks can rum businesses that uses Bitcoin as a mode of payment and medium for trading.
  • As the local banks are now allowed to operate with alliances or affiliates, they can now invest in bitcoin through them.

    A noticeable facet of the announcement:

    However, by this recent announcement by the Bank of Thailand, one thing has been made totally clear. The announcement blatantly reiterates the fact that the local banks do not have a liberty to indulge in direct involvement with crypto currency. Without any affiliates, Thailand local banks and other financial institutions are prohibited to deal with Bitcoin.

    Limitations of subsidiaries:

    A local Thai source, Blogone has reported that the certain limitations are still imposed on the financial activities of the local Thai banks. Although the local banks are allowed to join hands with affiliates that facilitate crypto currency dealings, their affiliates are restricted on these grounds:

  • They cannot offer its crypto related services to customers or public
  • They can only direct business dealings with those organizations that are certified or registered by Thailand’s Securities and Exchange Commission and Office of Insurance Commission.
  • These Crypto related branches of local banks are also prohibited to further their dealings on an individual basis.

    The Bank of Thailand (BoT) Regulatory Sandbox:

    Blogone claims that through this Sandbox, Thailand local bank affiliates can have some free hand in carrying out certain financial services that make use of Bitcoin. This liberty can only be enjoyed by the subsidiaries:

  • If they actively want to invest in digital assets with a sole objective of incurring financial innovation, OR
  • If they want to further enhance and revitalized the present quality or status of their financial facilities that they offer.

    At the start of this year, BoT passed a notice that claimed that banking institutions in Thailand are not allowed to trade or invest in bitcoin and take part in establishing crypto exchanges. This restriction can only be lifted if they are legally registered.

    According to the notice, BoT has also restricted the local banks not to advise the customers to trade through bitcoin and use credit cards for bitcoin purchases.

    A regulatory framework for Bitcoin from May onwards:

    However in May such restriction on bitcoin have been reduced to an extent. As the Thai government introduces a monitoring structure behind the concept of Bitcoin as “digital asset and digital tokens” things will now start to fall in place.

    Through the central bank issued digital currency, many financial problems regarding trading will be solved. This view is shared by the Thai government. This will propagate a totally new method of directing an interbank settlement. So if Thailand settles for its own Bitcoin, then;

  • Transaction costs will reduce,
  • The time taken for validation of transaction will also get reduced as compared to the intermediary time taken for current financial system.

    Thus with the start of July, Thailand have become one of the first country that has made Bitcoin to work in an environment that is controlled by the government.

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