Thai central bank to regulate stablecoins

[BANGKOK] Thailand's central bank expects to issue regulations on asset-backed stablecoins this year, an assistant governor said on Friday, after warning against use of a new baht-denominated stablecoin that was created abroad.

"The central bank is receiving opinions from market regulators and participants before announcing regulations, Siritida Panomwon Na Ayudhya told a briefing.

The Bank of Thailand (BOT) will regulate foreign currency-backed stablecoins, asset-backed stablecoins, and algorithmic stablecoins that are not illegal, she said.

The rules will not cover those without asset backing, such as Bitcoin or Ethereum and investors will have to take their own risks, Ms Siritida said.

The move came after the BOT on Wednesday warned against a new baht-denominated stablecoin, THT, which it said could expose users to cyber thief and money laundering.

Ms Siritida said service providers of baht-backed stablecoins would need central bank approval as they may be classified as electronic money (e-Money) and the BOT oversees risks associated with e-Money, such as settlement and money laundering.

This policy is in line with guidelines in countries such as Britain, Singapore, and Japan, she said, adding the central bank saw the benefits of fintech and was ready to embrace new innovations.

It is currently in the process of developing a retail central bank digital currency, she said.

The BOT will continue monitoring developments of new technologies and adopt policies that support the economy and can maintain financial system stability, Ms Siritida added.

REUTERS