Bank of Thailand approves Crypto Trading for Financial Companies, Thailand’s central bank has publicly announced new rules under which financial institutions, including commercial banks, asset management, securities and insurance firms, giving full approval to engage in cryptocurrency activities.
As Thailand continues to develop it's cryptocurrency regulations, that went into effect since last month. The country adds the new regulations onto the already provided ICO guidelines.
The new rules were published 1st August 2018 in a circular sent to all Thai based financial institutions, updating them of the new policies.
There are two sets of rules outlined, one for institutions and one for subsidiaries who can both now engage in cryptocurrency activities and digital token trading.
Rules for subsidiaries:
- Intended for insurance, asset management, brokerages and life insurance firms (all of which have their own regulatory bodies)
- Can create their own tokens
- Can trade cryptos
- Can create crypto businesses
- Fully regulated (AML/CFT)
Subsidiaries are permitted to engage in crypto businesses including issuing their own blockchain based token and investing in cryptocurrencies themselves. Providing they follow the rules set by their respective sectors regulators.
How ever, Start-ups and new subsidiaries wanting to enter the crypto market must for go through an approval process with the BOT (Bank of Thailand) via their parent companies. Applications would be considered on a individual basis case-by-case. Parent companies must be solely responsible for managing risk for the whole group, including any individual subsidiaries.
Anti-money laundering (AML) and Combating Financing of Terrorism (CFT), Security and Consumer Protection are all being heavily enforced and must be adhered too.
Rules for financial institutions:
- Very strict regulatory framework, believes considerable risk to financial system although is open to the improvement of services using blockchain technology
- Cannot issue tokens, or sell them.
- Cannot invest in cryptocurrencies.
- Cannot operate exchanges, brokers or dealers in any form.
- Cannot solicit or provide advice on crypto to retail (non-institutional) or non-accredited investors as defined by SEC.
- Can provide advice to accredited investors and institutions
- Can improve and develop services with cryptocurrency
Institutions, including commercial and investment banks are heavily regulated, and cannot hold cryptocurrencies.
The BOT cited that crypto as a industry is still young and therefore difficult to clearly assess and manage associated risks, the BOT (Bank of Thailand) believes customer confidence and Thailand's financial system could be affected by financial institutions holding cryptocurrencies.
Financial institutions can invest in crypto for the purposes of developing or improving existing services to the customers, by applying for a regulatory sandbox, according to an article published in Krungthep Turakij.
Although unlike subsidiaries - The Bank of Thailand has been clear on forbidding institutions from holding crypto, trading or creating their own. They cannot give advice on cryptocurrency investments either unless the investor is an institution or accredited as defined by SEC.