Thailand’s central bank has announced the rules under which financial institutions, including commercial banks and their subsidiaries, can participate in cryptocurrency services. These include securities, asset management, and insurance. This follows the crypto-regulatory structure, which was brought into action in the previous month.
The Central Bank of Thailand, Bank of Thailand (BOT), issued a circular on August 1 to all financial institutions of the country, where they were informed of the new crypto policy.
Regarding the fact that there is currently a regulatory framework for other ICO and cryptocurrency, BOT has canceled the earlier published circular, in February. At that time, the central bank called on financial institutions to abstain from participating in certain types of activities linked a crypto.
The new Bank of Thailand circular comprises conditions through which financial institutions and their subsidiaries can now participate in cryptocurrency and digital market activities.
These rules can be divided into two main categories; those that are applicable to financial institutions and those apply to their subsidiaries.
BOT claims that these companies can now deal with cryptography trading, including the release of digital tokens and investment in cryptocurrency, providing they comply with the rules set by their regulators. However, new subsidiaries wishing to participate in cryptographic need to apply for approval to the BOT, via their parent companies. They will be assessed depending on the case-to-case.
For financial institutions
Referring to the fact that crypto industry is still adolescent and so it is intricate to precisely manage and evaluate risks, BOT believes that the trust of customers and the financial system of the country can be affected owing to holding of cryptocurrency by financial institutions. It then mentioned four areas in which financial institutions are not allowed carry out crypto activities.
First, they can’t issue digital tokens or offer services that sell them. Second, they can’t invest in digital assets that include tokens and cryptocurrencies indicating BOT. Next, they cannot get into crypto businesses as dealers, exchanges, and brokers. And last, they are not authorized to advice any person who is not an accredited or institutional investor defined by SEC.