Virtual Currencies Not Legal Tender Says Bank of Thailand But Not Banned From Trading

The legal status of virtual currencies in Thailand, such as Bitcoin, has been uncertain over the past year, and a recent notification from the Bank of Thailand (BOT) has not provided much additional clarity.

Virtual currencies operate as a peer-to-peer currency with no central bank, relying instead on a distributed system of trust.  Bitcoin is perhaps the best known of the virtual currencies, achieving widespread prominence in 2012, but weaknesses in its underlying structure have recently been exposed, such as last month’s bankruptcy of Mt. Gox, one of its leading exchanges.  Details on the background of Bitcoin’s stucture can be found in this article in the Economist.

As for Thailand, the Thai-based exchange Bitcoin Co. Ltd. suspended trading in 2013 after a meeting with the BOT on the understanding that trading in the currency was illegal.  Last month, however, the exchange reopened after receiving a letter from the BOT indicating that it could trade after all.  The BOT’s most recent pronouncement is essentially a warning against buying virtual currencies including the Bitcoin, stating that they are not legal tender in the country, although it does not go so far as to ban their use in Thailand.  Instead, the BOT will continue to monitor trading in virtual currencies for any suspected illegal actions.  Reporting on the BOT’s most recent pronouncement can be found here in the Bangkok Post.

last updated 19 March 2014