This article was first published here
The Bank of Thailand (BoT) recently gave local banks the green light to set up subsidiaries to handle cryptocurrency operations, according to Thai news source Blogone.
A regulatory announcement published on August 1st by the BoT stipulates that Thai Banks can now invest in cryptocurrencies, issue tokens, run crypto-based businesses and provide crypto-brokerage services through subsidiaries.
However, the regulatory announcement pointed out that all financial institutions including banks are still banned from dealing directly with virtual currencies.
And even though financial institutions can now establish branches dealing in cryptocurrencies, such branches are not allowed to offer digital money-related services to the public or its customers.
They are only allowed to interact with businesses that have the approval of the Office of Insurance Commission (OIC) and the Thai Securities and Exchange Commission (SEC).
In spite of being allowed to offer customers crypto investment resources, they cannot do so if the intention is to invest in a digital asset whose objective is to improve financial service quality of develop “financial innovation”. Such customers are required to seek assistance from the BoT regulatory Sandbox.
The Path to Crypto Regulations
Earlier in the year, the BoT had released a prohibitory circular warning financial institutions in the country from participating in the establishment of crypto exchanges and trading or investing in crypto. This was in spite of the fact that registered crypto exchanges are legal to operate in Thailand.
The central bank also forbade banks from offering customers advisory services on crypto trading and investments, and also banned customers from making crypto purchases using credit cards.
In May, the government issued a framework for regulating cryptocurrencies and placed them under the mandate of the Thai SEC.
A month later, the Thai central bank said that it would be issuing its own digital currency to facilitate interbank settlements.