The banks in Thailand disapprove of the Tera Stablecoin and sternly warned everyone against the coin. Based on a report from the Bangkok Post on 18th March, the central bank of Thailand has passed a directive to the citizens of the country about a stablecoin that goes by the name THT (Thai Baht) in the cryptocurrency market that it does not have any protection and issuance legally and anyone who invests in the coin stands a risk of cyber fraud and money laundering.
Illegal according to the Law
Making reference to a standing law in the country for over sixty years, Pruettiong Srimachand, the assistant governor of the legal group of the central bank, said that all activities around this coin are tagged illegal.
Backing up his statement as part of the law, he quoted that the creation, circulation, usage, and issuance of any token or material for money is a [deep] violation of the 1958 Currency Act’s Section 9.
This coin is being issued on a platform called Terra and has given birth to several other stablecoins, which include the TerraKRW and TerraUSD that was made public in September 2020. This stablecoin and platform are also behind an online wallet fueled stablecoins, Chai payments app, which is popularly used all across the Asian region.
Competition with the National Currency will not be Tolerated
The fear around THT is owing to the fact that it is pegged to the Thailand national currency, Thai Baht, which can likely cause a fragmentation in the currency system of Thailand and the long run, become a competition with the currency issued by the central bank of the country.
Mr. Srimachand added that the usage and circulation of this stablecoin would eventually affect the confidence of the general public in the ultimate stability of the currency system of the nation, which is the bedrock of all economic activities.
The platform responsible for the issuance of this illegal stablecoin, Terra, was established in South Korea in 2018. It has received huge support from Polychain and Binance, worth $32 million. The firm, however, became the founder of Terraform Labs in January 2021 and has raised about $25 million in the Galaxy Digital funding round.
The Thai Central Bank has begun its comprehensive research on having a national digital currency after an announcement made on 23rd February following the footstep of China who will likely made its country’s CBDC public before the Winter Olympics games in 2022.