The Bank of Thailand has given a new crypto policy under which financial institutions, including commercial banks, and their subsidiaries can engage in crypto activities.
This follows the country’s crypto regulatory framework that went into effect last month. The Central Bank issued a new circular dated August 1 to all financial institutions in the country, informing them of its new crypto policies.
In the circular, conditions were outlined under which financial institutions and their subsidiaries can now engage in activities involving cryptocurrencies and digital tokens.
The rules can be divided into two broad categories: those that apply to financial institutions and those that apply to their subsidiaries.
RULES FOR SUBSIDIARIES
Financial institution’s usually have subsidiaries that offer financial products and services. This subsidiaries are brokerage, asset management, insurance, and life insurance etc.
These companies are permitted by the Bank of Thailand to engage in crypto businesses including issuing digital tokens and investing in cryptocurrencies, provided they follow the rules set by their respective regulators.
New subsidiaries wanting to engage in crypto activities, however, must apply for approval from the BOT through their parent companies. They will be considered on a case-by-case basis.
To monitor their activities, BOT encourages them to follow regulatory guidelines including anti-money laundering (AML), combating the financing of terrorism (CFT), IT security, and consumer protection.
RULES FOR FINANCIAL INSTITUTIONS
The rules for financial institutions, which include commercial banks, are much more strict. BOT gave a list of four areas that financial institutions must not engage in.
1. They cannot issue digital tokens or provide any service selling them.
2. They cannot invest in digital assets which includes “both tokens and cryptocurrencies,” the BOT specifies.
3. They also must not engage in crypto businesses, including as exchanges, brokers, or dealers.
4. They cannot solicit or give advice on crypto investments to anyone that is not an institutional or accredited investor as defined by the SEC.
Krungthep Turakij publication however, revealed that financial institutions can issue or invest in cryptocurrencies for the purpose of developing or improving their services to customers by applying for the regulatory sandbox.
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