The virtual money bitcoin reopened for trading and selling in Thailand after a letter from the Bank of Thailand stating that Thai law does not regulate the digital currency.
Last year, Bitcoin Co Ltd sought permission from the central bank to operate a virtual money exchange here but was told bitcoin activities are illegal in Thailand because there is no Thai law regarding digital currency trading.
Bitcoin managing director David Barnes told the Bangkok Post in an email that a recent central bank letter provided it the impetus to reopen trade and sales of bitcoins, which it restarted last Saturday.
The Bitcoin Co website said the letter stated that bitcoin exchange operations do not fall under the scope of Finance Ministry regulations unless foreign currencies are also offered for exchange. Bitcoin Co only offers bitcoin trading for baht and operates solely within Thailand.
“We are now officially open for business, and we are both buying and selling bitcoins,” said Mr Barnes.
But a central bank official denied the company’s claim, saying it interpreted the letter to serve its own interests.
The official said the letter stated that bitcoin exchange operations do not fall under Thai law, as no foreign currency exchange is offered to customers, meaning it is not eligible to seek an operating licence in the country.
The letter also stated that even though the company allows its customers to trade bitcoins only for baht, it could not prevent customers from exchanging bitcoins for foreign currencies either locally or abroad, so the business is involved with foreign currency exchange and falls under the Thailand Exchange Control Act of 1942.
“Hence, the company cannot operate that kind of business,” said the letter, adding the central bank has no policy to allow wider types of currency exchange businesses here.
The digital currency become a sensation last year, but because bitcoins are only virtual currency, many governments have attempted to prohibit their activities to protect consumers including Thailand.
Mr Barnes said the bitcoin market in Thailand is still very minuscule, with only slight movement based on activities such as buying computer games or web hosting instead of people using bitcoins as an investment as often happens in other countries.
The exchange rate yesterday at 7pm local time was 20,837 baht a bitcoin, a 595% jump from last July’s price of 3,000 baht.
Technology expert Rom Hiranpruk said the Bank of Thailand should be open to regulating the new type of currency and seek new opportunities with bitcoins instead of rejecting the currency out of hand.
China recently banned bitcoin transactions, while the US government views bitcoins as a type of currency that requires registration and thus regulation.