It was big news this week when a Bangkok startup announced that Thailand had outlawed Bitcoin, making it the first country in the world to issue a blanket ban on the digital currency. But the reality turns out to be more complicated.
In its statement, Bitcoin Co Ltd said it had tried to register its business with Thailand’s many government agencies, and when it reached out to the Thai central bank, it was told that buying and selling bitcoins, using bitcoins to buy or sell goods and services, and transferring bitcoins in and out of Thailand were all currently illegal.
However, the central bank did not ban Bitcoin outright. Instead it issued a preliminary ruling that using bitcoins as described was illegal because of a lack of existing laws that dealt with the relatively new realm of anonymous, cryptographically protected digital currencies. Moreover, the Bank of Thailand is withholding final judgement on Bitcoin while it looks into the matter further, much like many other countries.
Crucially, the Bank of Thailand does not have the constitutional ability to outlaw anything. But it is entrusted to administer foreign exchange, and the possibility of Bitcoin affecting Thailand’s foreign exchange rate and capital controls that has the central bank especially wary.