The Securities and Exchange Commission of Thailand has prohibited cryptocurrency payments, according to a statement issued on Wednesday.
It will be illegal to pay for goods and services with the help of crypto starting from April.
The regulator says that such a means of payment threatens the stability of the payment system in the country, which is already "highly efficient." Cryptocurrencies powered by public blockchains do not adhere to security standards, which makes investor protection more challenging. Pricing goods in crypto will prevent the Bank of Thailand from helping financial institutions during liquidity crises.
The volatility of cryptocurrencies is also one of the main reasons behind the decision. Even though some crypto payment providers instantly convert digital assets to the baht, there are still hidden costs involved in such a transaction, the SEC says.
Moreover, using multiple payment systems may be costly and confusing for consumers.
The Thai SEC has also emphasized that it will still be legal to invest in digital currencies. Thais hold roughly $3.4 billion worth of cryptocurrencies as of January.
In fact, it says that it supports innovation related to blockchain technology. It is worth noting that Thailand is one of the leaders in the central bank digital currency race.
In July 2021, the Thai SEC slapped Binance, the world's largest exchange, with a criminal complaint. In January, the company signaled its intention to open a new branch in Thailand.