The Bank of Thailand regulates financial business group’s operation of digital asset business

Scope of operation of the DA-related business

• Commercial banks are prohibited from operating DA-related business.
• Companies in a financial business group are allowed to operate the following DA-related businesses, provided that such businesses are not contrary to the above key objectives or other laws or guidelines of supervisory authorities, both domestically and internationally.   
  • the DA business and business of being a service provider which provides a system for offering for sale of digital tokens, according to digital asset business law or similar business in foreign countries; and
  • a business having a core  or main activity relating to the DA or a DA-related business which has not been regulated by any other authority.

  Parent companies of those companies in a financial business group which intend to operate any of the above DA-related businesses must obtain a permission from the BOT on a case by case basis. 

   

Scope of DA-related transactions

• Commercial banks and companies in a financial business group (collectively, the “Regulated Entities”), which are not regulated by any relevant authority, may issue or hold DA only for the purposes of development of innovation or enhancement of efficiency or quality for the provision of services in respect of financial business or any supporting business.
• Companies in a financial business group, which are regulated by any relevant authority, may issue or hold DA in accordance with the regulations prescribed by such authority.
• The Regulated Entities may only invest in investment units or trust units which have investment policies to allocate only a small portion of funds raised for an investment in DA, and may not invest in investment units or trust units in the funds or the trust funds (as the case may be), the investment policies of which are mainly to invest in DA.
• The Regulated Entities may not grant any type of loan, e.g. personal loan or credit card for a purpose of investing in DA, to any of their individual customers.

This BOT Notification also addresses regulations in respect of risk management supervision in the areas of, among others, the DA-related business investment limit and consumer protection.

DA-related business investment limit

Commercial banks are allowed to (i) invest in DA-related businesses, whether in the companies in or outside a financial business group, and whether directly or indirectly; (ii) grant a loan to, incur any obligations or liabilities for the benefit of or enter into any transaction similarly to granting of loan with companies in the financial business group which engage in the DA-related business, whether directly or indirectly through companies in the financial business group, provided that the investment or transaction amount shall not exceed 3% of their capitals.

Companies in a financial business group may invest in DA-related businesses, in companies in or outside a financial business group, provided that the investment amount shall not exceed 3% of their capital.

Consumer protection

The Regulated Entities must properly provide protection to  their customers having regard to the risk level of products and the risk tolerance of customers by following guidelines set out by the BOT as follows:

• The Regulated Entities must not provide services or take any action through their available channels that would give their vulnerable customers more access to the DA.
• The Regulated Entities are prohibited from soliciting, offering for sale, suggesting or providing information related to the DA-related business, product or service to their customers.
• The Regulated Entities are prohibited from requesting from customers consent to disclose customers’ data to companies which conduct DA-related business for any marketing purpose.