Earlier this week, Thailand’s national bank ruled Bitcoin illegal. The news came as a shock to many who use the virtual currency, especially those who are not Thai, and the ruling left people wondering: Can the bank make laws?
The answer is “yes and no.” Bitcoin exchange services in Thailand weren’t actually declared “illegal,” per se, but Bitcoin Co. Ltd. — the company this news originally came from — has been operating in Thailand without a license, which is illegal.
Any type of currency exchange service in Thailand needs to get a license from the Bank of Thailand, according to the Exchange Control Regulations in Thailand whether it’s “real” money or not. That’s why Bitcoin Co. Ltd. needed to be authorized to operate, and since it didn’t have that authorization, it was forced to shut down.
Prasan Trairatworakun, Bank of Thailand’s governor, says that the bank hasn’t approved Bitcoin Co. Ltd. to do business in Thailand because the transactions that the company is involved in center around the exchange rate but are not an actual currency exchange (since Bitcoin is not a physical currency).
Of course, this is something really new for Thailand and the explanation Prasan gave comes from old laws because we don’t have any rules to support electronic currencies. Therefore, since there are no applicable laws that can control or tax Bitcoins, they are de-facto illegal (for now).
However, the Bank of Thailand isn’t just ignoring this matter. It’s working with the relevant authorities such as the Ministry of ICT and the Securities and Exchange Commission to sort this out. Using Bitcoin in any way within the Kingdom of Thailand is banned for now, but if Bitcoin Co. Ltd. has proof that this digital crypto-currency has legally operated in other countries without interfering with the real-money exchange system, the Bank of Thailand might reconsider its ruling.
Image: Mike Cauldwell/Wikimedia Commons
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This article originally published at Tech in Asia