Thailand’s Banks Can Now Open Subsidiaries to Invest in Cryptocurrencies

  • Bank of Thailand (BoT) has now allowed local banks to open subsidiaries for investing in cryptocurrencies.
  • Subsidiaries may also offer brokerage services to crypto dealers.

The Bank of Thailand (BoT), the country’s central bank, reportedly gave all local financial institutions permission to launch subsidiaries, which may offer certain types of banking services to cryptocurrency investors.

Thailand’s banks will now be able to offer brokerage services to crypto-related companies, invest in crypto and blockchain startups, or even operate their own crypto business, according to a recent announcement by the BoT.

Subsidiaries May Issue Cryptos

The banks’ subsidiaries may also issue their own digital currency, the announcement noted. However, Thailand’s central bank will still not let local financial institutions directly offer banking services to individuals and organizations dealing in cryptocurrencies.

While local banks in the country have been allowed to establish subsidiaries for certain types of crypto-related activities, they are strictly prohibited from providing their own special services or investment schemes involving digital currencies. Local banks and their licensed subsidiaries are also not allowed to buy, sell, or trade cryptocurrencies on behalf of their customers.

Thailand’s financial institutions may, however, recommend approved sources for investment advice on digital assets. Banks can also conduct an initial coin offering (ICO), but it should be geared towards “financial innovation”, which aims to enhance existing financial services. The ICO must also adhere to guidelines outlined in BoT’s regulatory sandbox.

Moreover, Thailand’s banks may only work with crypto firms regulated by the country’s Securities and Exchange Commission (Thailand’s SEC) and the Office of Insurance Commission (OIC).

In February, the BoT issued a circular instructing local banks not to trade or invest in crypto assets. Per the circular, financial institutions were prohibited from operating crypto exchanges, although independent digital currency exchanges could legally be established in Thailand after completing a registration process.

Cryptocurrencies Are Securities

Cryptocurrency purchases with credit cards were also banned by Thailand’s authorities, and in May, cryptos were classified as “digital assets or digital tokens.” This means they are considered securities and must be regulated by the Thai SEC.

Notably, in June, the BoT announced it was experimenting with a “new way of conducting interbank settlement” which could be implemented with a central bank-issued digital currency (CBDC). The reserve bank had said a CBDC could make it more efficient to process payments because it would require “less intermediation...compared to traditional systems.”

Recently in July, Thailand’s government released a comprehensive regulatory framework for ICOs, making it one of the first countries in the world to provide legal support for the controversial crowdfunding method.

Based on these developments, it appears authorities in Thailand are receptive to the evolving cryptocurrency market, but also seem to be looking to protect local firms and individual investors from risky and potentially fraudulent schemes.

JPMorgan Chase Positively Wades Into Crypto After Years of Hate

Colin Muller
  • JPMorgan is now servicing Gemini and Coinbase
  • The move represents a full reversal of JPM's stance
  • Crypto is now deeply institutionalized

The financial services giant and bank JPMorgan Chase & Co have seemingly reversed on a long-held stance, that crypto is bad, by beginning to service U.S. cryptoasset exchanges Gemini and Coinbase.

JPMorgan’s apparent reversal comes after years of institutionalized disdain for crypto, with the bank’s CEO Jamie Dimon being a vociferous critic circa 2017. According to Bloomberg, JPMorgan had been conducting due diligence on the exchanges “for months” before making the move. The bank’s adoption of crypto signals what can only be a highly regulated crypto-fiat landscape.

During 2019, JPMorgan had in fact started to visibly thaw on the subject of crypto, even experimenting with their own distributed ledger tech in the form of the so-called “JPM Coin”.

Dimon displayed during an interview his awareness of the competition posed by crypto, directing his people to assume that crypto and/or Fintech was “coming [...] to eat your lunch.” Despite this, he was bearish on the prospect of Facebook’s Libra project succeeding or even launching, saying in October 2019 that it would “never happen”.

big dropJPM chart by TradingView

JPMorgan’s publically traded stock has fallen recently, retreating from all-time-highs set in December 2019 in February, even before the coronavirus pandemic started to wreck the markets in March. It is down about 37% from those highs, trading now at about $87.

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