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Everyone in Thailand knows about Bitcoin and crypto currency. Thailand was on of the first South East Asian nations to accept Bitcoin and crypto as a form of payment. There have been a number of crypto exchanges in Thailand over the years but many closed down once the government wanted the market to be regulated an crypto exchanges registered. Below we describe Crypto regulation There have been loads of regulations. Much like the Cannabis Act that is forming or digital accountability. We cover this under the insights column.
Of late the government had changed their attitude towards crypto. Thailand does not see digital assets as a substitute for fiat currency. Hence the market must be tightly monitored to maintain financial stability with investor protection. Likewise to protect the country again money laundering. This is where crypto regulation starts.
In December 2021, the Bank of Thailand (BOT). They publicly urged commercial banks to stop trading digital assets. Likewise to stop from direct trading in digital assets. The bank looked at the risk to customer deposits and there was concern over the volatility of crypto. Note that crypto had been in Thailand long before 2021
In January 2022 the Securities and Exchange Commission (Thailand) (SEC) as well as the Bank Of Thailand (BOT) announced that they had a plan to ban digital‐asset business operators. It become difficult for a while to move money from Thai Baht into crypto. Likewise they made it difficult to facilitate the use of cryptocurrencies as payments for goods and services.
Then on the 23 March 2022, Reuters reported that Thailand issued rules banning use of digital assets as payments from 1 April 2022.
Meanwhile this was after regulatory notifications such as the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018). This law continued to govern licensing of digital asset business operators (DABOs) and set AML/CFT obligations.
So does it make sense. Well crypto trading is permitted (under certain conditions or licenses). Likewise the use of general payments is discouraged or prohibited. You might recall that Thailand was one of the countries which had a Bitcoin “ATM” machine. Currently there is a robust licensing and supervision regime for domestic exchanges. This was against that backdrop, the challenge of foreign or unlicensed crypto platforms has grown. Cross border flows become difficult to watch. This is where crypto regulation starts.
Why is Thailand tightening its digital-asset regulation and focusing on unlicensed as well as foreign platforms? Several motivations can be identified:
Investor protection and market integrity. Even before 2022 Thailand already had a digital asset boom period.Retail investors experienced the volatility of the crypto market as well as fraud and platform failures. The government stepped in to protect the public requiring stricter operator obligations.
Financial-stability. The crypto coins can make the Thai Baht unstable. If payments with crypto becomes widespread it weakens the BOT oversight much weaker. This affects money supply and monitory policy. They have expressed concern before on crypto being used as payments.
AML/CFT and cross-border risks. With foreign or unlicensed platforms. They tend to have weak AML controls. This tends to attract illicit funds and may also facilitate money‐laundering as well as tax evasion. Thailand wants to limit and close the gaps. Note that the meaning stands for Anti-Money Laundering / Countering the Financing of Terrorism.
Innovation leadership and competitiveness. Thailand has tried before to be the crypto hub of Asia. They want to expand their Fin-tech sector and to attract investment into the digital-asset business, but under a regulated framework. So the regime is not purely prohibitive but very liberal with control.
While the regulatory architecture in Thailand is moving in a clearer direction. There are several observations and open issues merit commentary:
There is a positive side to crypto in Thailand. They have made large strides to a clearer regime for crypto. The licenses are straight forward. Likewise laws and controls for disclosures as well as banned payment usage, AML obligations.
Much like the cannabis laws you will see that with regulation the smaller operators leave the market as they cant afford to meet the regulations. What you will find is large international operators in Thailand.
The Thai government also does not want there to be tension between protecting the pubic and encouraging innovation. The government wants to be regionally competitive without pushing development offshore.
The reasons why the system works is because of the government be this the SEC, BOT as well as the Ministry of Finance and Anti-Money Laundering Office. They will enforce the laws against unlicensed as well as foreign platforms. While symbolic actions (e.g., allegations against Binance) are helpful.
3.3 The payment-versus-investment distinction
Thailand draws a clear line between investment and trading. Of course permitted under license. As stated above the Bank of Thailand noted that they don’t want crypto used to buy and sell goods. Looks good on paper but in reality people are buying and selling property in stable coins like USDT. The lines do blur.
Likewise a review of March 2022 notifications shows that the SEC’s ban on digital‐asset payment usage came with penalties with fines of up to THB 300,000 + daily fine of THB 10,000 for continuing violation. Hence you should be cautious. Much like the advert which later was pulled offering condos for sale in USDT. Note that acceptance of crypto payments (or facilitation thereof) without proper licence may expose them to regulatory sanction. This is where crypto regulation starts.
3.4 Implications for foreign platforms and cross-border flows
Foreign platforms that have historically served Thai clients from offshore need to revisit their Thailand exposure. Some practical steps:
This can be done by blocking Thai IPs, as well as restricting Thai bank‐account links. They can also add disclaimers. Access via VPN however will get around this.
They must look if they should obtain Thai DABO licence (if this is feasible). Likewise they can partner with a licensed Thai entity. Be aware of control and Thai banking interface.
Mapping how Thai law treats digital asset business for foreigners. The Emergency Decree and subsequent guidance consider service provision to Thai persons as triggering Thai regulatory reach.
You will need to ensure that the AML/CFT frameworks align with Thai expectations.
3.5 Recovery and dispute-risk environment
For lawyers in Thailand. Thailand’s crackdown on unlicensed platforms creates avenues for recovery and investor-remedy work. For example:
Likewise investors who accessed unlicensed platforms may allege “illegal operation” and seek to recover funds through civil suits. This is however very difficult.
There may be liability claims where a licensed platforms falls short on service-quality as well as disclosures and training mandates . This might give rise to an investor class action.
To anticipate where the regulatory regime is going next, monitor the following:
Licence applications and regulator announcements: The number of DABO licenses which have been issued or, revoked, likewise with applications pending will provide a signal of regulator capacity and market openness.
Foreign-operator enforcement: Watch out for further announcements of complaints or sanctions against unlicensed foreign platforms. Those who are targeting Thai clients. This will indicate how aggressive the SEC and BOT will be in extraterritorial enforcement.
Clarification on stablecoins and tokenised assets: Many jurisdictions (and Thailand) are considering how stablecoins (asset-backed, algorithmic) will be regulated. How will Thailand carve out “token offering” vs “digital asset business operator” vs “payment token” categories?
Payment-usage regulation: Even though crypto payments are banned (or tightly controlled) in Thailand. There are pilot initiatives such as the crypto-to-baht conversion for tourists may be used test boundaries. Recent pilot scheme for foreign tourist crypto-to-baht conversion has been reported.
Role of banks and payment systems: The BOT’s attitude remains cautious with crypto coins regarding banks’ involvement in digital assets. How the banks interface with licensed exchanges will affect the crypto ecosystem.
Consumer-investor education and disclosure: Since the SEC now mandates training as well as knowledge tests for new clients of DABOs (from 2022). How effective these measures are will influence investor outcomes. This is where crypto regulation starts.
For domestic exchanges and digital-asset business operators
You will need to ensure your licence is valid. Likewise you have completed your client on-boarding and training obligations. Your service quality has been fulfilled. You also undertook an audit of compliance with the 1 Jan 2023 reporting obligations (IT capacity, error logs).
If you are planning to partner with foreign platforms. Likewise if you are going to provide cross-border services. You will need to perform a risk assessment of Thai-client exposure. Consider blocking Thai clients or obtaining a Thai licence.
You will need to develop robust AML/CFT procedures. Likewise you will need to consider external audit reviews. Also you will need to review token listings carefully for whether they fall under “securities tokens” or “utility tokens” and whether Thai securities law applies.
You will need to see if you business can be evaluate whether it constitutes “digital asset business operator” under Thai law. This in the context of Thai clients. If yes, assess cost as well as benefit of acquiring Thai licence vs excluding Thai market.
Likewise If you continue to serve Thai-clients without licence. You can prepare for an enforcement risk. This could include criminal complaints as well as asset freezing or worst – bank-account seizures
Consider local partnerships with licensed Thai entities, but ensure clarity of control, ownership and licensing risk.
When you are partnering with digital asset firms. Likewise custody as well as exchange interface and wallet linking. You must map the crypto-platform’s licensing status in Thailand.
Note BOT warnings about bank involvement in crypto trading; ensure internal policies comply with BOT and SEC views.
You will need to monitor regulatory guidance on crypto payments. This although it is banned for general use, pilot initiatives may change the dynamic (tourist crypto-conversion pilot). This is where crypto regulation starts.
The information contained in our website is for general information purposes only and does not constitute legal advices. For further information, please contact us.