Bank of Thailand Suggests Bitcoin Not Illegal But Warns Against its Use
The Bank of Thailand (BOT) has issued a statement on bitcoin, warning consumers that it is not a currency and that its use comes with inherent risks, reports say.
The statement bears similarities to others issued from central banks around the world, most recently Mexico and Germany, but could be considered an improvement in the legal status of bitcoin users, as Thailand was widely considered to have implemented a bitcoin ban in the summer of 2013.
The bank stated, according to a partial translation published online:
"Bitcoin is electronic data. Thus, it’s not considered a currency and can’t be used for payments, and [is] not considered legal tender like money. With no self worth, the value of such data varies based on the needs of the market. Bitcoin changes in value very quickly and it could became something of no value if none desired it."
Effectively, bitcoin is just electronic data with no intrinsic value, and its value rises or falls depending upon the whims of the market.
The BOT also said that the illegal theft of data and the closing of online businesses such as Mt. Gox pose a threat to consumers.
Furthermore, consumers' legal recourse will be severely limited in the case of any claims over coins stolen or sent to the wrong wallet, or over goods purchased with bitcoin but not received.
While hardly a ringing endorsement of digital currencies, the bank's words may come as good news for bitcoin users and businesses in Thailand. The key point being that they have not banned the cryptocurrency.
Over the past nine months, the legal status of cryptocurrencies in Thailand has been an issue of great confusion.
Back in July 2013, Thai-based exchange Bitcoin Co Ltd suspended trading after a meeting with the Bank of Thailand in which the bank allegedly declared trading in the cryptocurrency illegal. A post on the company's website said at the time:
“At the conclusion of the meeting, senior members of the Foreign Exchange Administration and Policy Department advised that due to lack of existing applicable laws, capital controls and the fact that Bitcoin straddles multiple financial facets the following Bitcoin activities are illegal in Thailand.”
Then in February of this year the exchange reopened after receiving a letter from the bank seeming to indicate that it could trade after all. However, the legal status of bitcoin trading in the South-East Asian country was still unclear.
Adding to the confusion, the exchange received another letter days later, indicating that “interpreted the letter to serve its own interests”, and that it perhaps acted improperly by reinstating its services. At this stage, Bitcoin Co Ltd decided to remain trading until a clear statement was made.
One issue with exchanges is not so much the legality of owning bitcoin, but whether they qualify for a licence to trade in cryptocurrencies, which could be considered a foreign exchange activity and therefore illegal.
Thailand’s Foreign Exchange Administration and Policy Department had also previously told Bitcoin Co Ltd that it was illegal to buy or sell bitcoins, exchange bitcoins for goods or services, or send and receive bitcoins outside of Thailand in an early hearing on the matter.
Hopefully, the legal status of exchanges in the light of the new statement will become clear in coming days.
Bangkok image via Shutterstock