Regulation, whether it is in Fintech or cryptocurrency, seems to be inevitable moving forward. Thailand is the latest country to consider Fintech regulation, which will impact bitcoin and other cryptocurrencies in the country as well. The country’s central bank wants more regulation to protect customers and prevent systemic risks.
It comes as hardly a surprise to find out a central bank wants more regulation for its competitors. Innovative concepts in the Fintech scene, such as cryptocurrency, are often misunderstood. While there is nothing wrong with being cautious, regulation can hinder innovation and growth in these sectors if applied incorrectly.
To put this into perspective, the Bank of Thailand wants all fintech companies to be registered with the central bank. In this day and age, the majority of startups will look for a banking partner, so that shouldn’t be too much of a problem. But things will not go that easily, as there are other requirements to take into account as well.
The Payment System Act will need to be implemented soon, according to the Bank of Thailand governor. This new guideline supervises electronic transactions and lets businesses verify client identities as a new payment standard. This may not sound out of the ordinary, but rest assured this verification process will be very thorough.
However, it is important to note the Bank of Thailand is not planning to impede innovation, as they want to create a sandbox environment. The primary objective is to give FIntech players a chance to test their innovation in a safe and secure environment while being compliant with regulation.
Financial institutions are trying to reduce the costs of service operation by embracing new technologies. It will be interesting to see how these regulations affect Bitcoin companies in Thailand moving forward, though. A new fund has launched for Fintech Investments by Siam Commercial Bank earlier this year. Half of this money will be invested in startups.
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