Combating Illicit Flows: Thailand Implements Strict New Checks on High-Volume Stablecoin Trades

The institution announced that this measure targets the country’s shadow economy, which accounted for nearly 41% of its GDP by 2015. The Bank of Thailand is already applying the proposed checks on large cash transactions and on gold bullion movements, reducing volumes considerably.

Key Takeaways

• Thailand’s bank set up checks to flag USDT transactions, restricting evasion of compliance measures.
• New source-of-funds rules cut large cash withdrawals by 35%, boosting the national electronic economy.
• Authorities restricted abnormal gold bullion buying, dropping monthly volumes to strengthen the local baht.

Bank of Thailand Targets Stablecoins Transactions in Gray Economy Crackdown

The Bank of Thailand is taking action to stop the growth of the country’s buoyant shadow economy through stablecoins.

Vitai Ratanakorn, Governor of the Bank of Thailand, declared that as part of the institution’s fight to curb illicit activity through the established financial system, the bank was implementing new checks on both stablecoin transactions and gold bullion purchases.

Through the national Securities and Exchange Commission (SEC), the bank established a system to flag transactions using USDT, a dollar-pegged stablecoin, and initially found that some large transactions with abnormally large volumes might be avoiding regular channels to sidestep compliance measures.

In addition, the bank has been scrutinizing large cash deposits since April, forcing customers who withdraw over $150,000 to explain why they need cash instead of using electronic money.

Ratanakorn explained that these measures had reduced these withdrawals by 35%, adding that source-of-funds statements will be required for equally large deposits in the future.

Gold bullion is also a target of the action, with similar measures that seek to close loopholes, including the withdrawal of unusually large amounts of gold flagged as abnormal by the national anti-money laundering office.

These have already rendered results, reducing gold withdrawal volumes from 4,000 kg to 700 kg per month, easing the strenghtening of the value of the Thai baht.

Ratanakorn stressed that “the measures we are implementing are not short-term fixes; they require the continuous deployment of multiple parallel strategies.”

Thailand’s shadow economy is believed to be one of the largest globally, accounting for a large portion of the country’s Gross Domestic Product (GDP).

These measures follow the establishment of a data bureau to investigate irregular money flows in November. At the time, Finance Minister Ekniti Nitithanprapas, who leads the office, mentioned crypto platforms and currency exchanges as gateways for illicit flows entering the country.