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Thai regulator floats new rules for crypto custodians

Written by Stephanie Pearl Li Published on   2 mins read

Thai citizens lifted trading volumes on crypto exchanges to USD 2.5 billion in 2020, according to a report published by the Bank of Thailand in April. 

Thailand’s Securities and Exchange Commission on Wednesday proposed new rules for the custody of investors’ holdings in the digital asset business. The SEC’s new proposal covers the management of fiat money, digital asset lending, and interest rates for any platform that holds customers’ crypto.

“The SEC’s policy is to strengthen the oversight of digital asset business operators with a focus on continued quality development and investor protection reliability of such business operators. This means the records of investors’ assets under custody of the business operators must be accurate, complete, and updated, while the assets must be properly protected from relevant risks,” the SEC said in an announcement.

Under the new proposal, mobilizing fiat money from clients’ accounts by digital asset businesses shall be subject to regulatory approval by multiple authorities, with checks and balances in place, according to the announcement.

The SEC is proposing to ban the practice of offering yield on using custodied assets, whether crypto or fiat money. All asset records should be maintained to ensure they are accurate and up to date. The SEC also intends to prohibit loans of digital assets, and interest rates offered by digital asset business operators must not exceed the rates of commercial banks.

The commission’s public consultation will end on September 22. After that, when the SEC begins implementing the new rules, business operators will have one month to ensure their operations are compliant.

The public consultation is taking place nearly a week after the Bank of Thailand announced plans for trials of its retail central bank digital currency in the second quarter of 2022.

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