BoT’s concern about using digital assets to make payments

A customer pays for a meal at Lim Lao Ngow, a noodle shop in Siam Square One, with Bitcoin. (Photo: Pawat Laopaisarntaksin)

The Bank of Thailand is concerned about the use of digital assets to pay for goods and services due to their price volatility.

The use of digital assets as a means of payment for goods and services has become a growing trend.

Digital assets are associated with high price volatility and the risks of cyber theft, personal data leakage and money laundering. This could be detrimental to traders, businesses and consumers, said Chayawadee Chai-Anant, senior director of corporate communications at the central bank.

If digital assets become widely used as a means of payment for goods and services, such risks could affect the stability of the payment system, financial stability and consumer protection, she said.

The means of payment according to the definition of the central bank cover ubiquity, store of value and trust.

The central bank is not concerned about investments in digital assets because investors accept the risk in this case, Ms. Chayawadee said.

Paying for goods and services through digital assets is not illegal. In addition, the central bank does not prohibit the involvement of commercial banks in digital assets through their subsidiaries. But banks can bear a higher cost of managing risk with a higher risk allowance, she said.

The central bank does not agree to commercial banks getting directly involved in risky digital assets, as commercial banks have to take care of depositors, Chayawadee said.

The central bank, in coordination with the Securities and Exchange Commission and other agencies, is considering guidelines to regulate the use of digital assets as a means of payment for goods and services to limit risk.

Priority will continue to be given to the use of technology to promote financial innovation, improve the efficiency and security of payment systems and preserve the stability of the overall economic system, she said.

The central bank has developed a consultation paper on the future financial landscape, including digital assets. The document is expected to take shape in the first quarter of next year, Ms. Chayawadee said.

Sakkapop Panyanukul, senior director of the economic and political department, said the central bank was not concerned about all aspects of digital assets. His biggest concern is with blank coins, which are not backed by any assets, he said.