Thailand’s Central Bank Governor Warns Against Illegal THT Stablecoin

Thailand’s central bank governor warns against illegal THT stablecoin, which is a Baht-pegged stabelcoin produced by Terra that is coming under heavy fire from Thai bankers so let’s read more in our latest crypto news today.

According to the Bangkok Post report on March 18, the central bank told its citizens that the Thai Baht digital has no legal assurances or protection so that the users will be at risk of cyber theft and money laundering. Thailand’s central bank governor Pruettipong Srimachand stated that these activities of the stabelcoin are considered illegal:

 “The creation, issuance, usage or circulation of any material or token for money is a violation of Section 9 of the Currency Act 1958.”

The stablecoin is issued on the Terra platform and produced various other stablecoins like the TerraUSD that was first issued in September 2020 and TerraKRW which is behind the Chai payments app and the e-commerce wallet. The THT is pegged to the Thai Baht and raised fears that it could cause fragmentation of the Thai  currency system if it tries to compete with the central bank issued currency as Pruettipong added:

“Such usage would ultimately affect the general public’s confidence in the stability of the national currency system, which is the cornerstone of all economic activities.”

Terra was founded in 2018 in South Korea and launched with $32 million funding from Binance and Polychain. However, at the start of this year, the company behind the platform Terraform Labs raised $25 million in new funding rounds from Galaxy Digital, Pantera Capital, and Coinbase Ventures. The military-backed government in the country has a similar stance to the one in China where only the central bank-issued digital currency will be tolerated.
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China has sped up its program for the CBDC release with further infrastructure tests before the launch which will coincide with the 2020 winter Olympics in Beijing.

The Bank of Thailand accelerated its own research into the national CBDC with the announcement made on February 23 of a joint effort in coalition with the Hong Kong Monetary Authority, the Central Bank of the United Arab Emirates, and the Digital currency institute of the PBOC.

As recently reported, IBM and Thailand’s central bank used the blockchain technology running on the IBM Cloud to launch the first DLT-based platform for government savings bonds. In the first two weeks of operation, the blockchain-based platform issued $1.6 billion of these bonds.