Officials to educate public on bitcoin

Officials to educate public on bitcoin

Ministry warns about cryptocurrency's risks

Bitcoin is accepted at this shop in Siam Square. Pawat Laupaisarntaksin
Bitcoin is accepted at this shop in Siam Square. Pawat Laupaisarntaksin

The Finance Ministry will join with other authorities to educate people about bitcoin after the cryptocurrency's roller-coaster ride in recent weeks, says finance permanent secretary Somchai Sujjapongse.

The ministry is concerned that cryptocurrency trading will have parallels with investment in Ponzi schemes and therefore people must be made aware of the high risks involved before they plough their money into digital currencies that are not regulated yet, Mr Somchai said before a meeting with three other regulators on the issue.

The other regulators taking part in the meeting were the Bank of Thailand, the Securities and Exchange Commission (SEC) and the Anti-Money Laundering Office (AMLO).

The meeting came after Prime Minister Prayut Chan-o-cha instructed the Finance Ministry to educate people about the risks of bitcoin investment after the recent sharp surge in bitcoin's trading value prompted him to worry that Thais would fall victim to cryptocurrency speculation.

Bank of Thailand governor Veerathai Santiprabhob last week raised a warning flag on cryptocurrencies, saying they are not legal tender.

The central bank, however, has declined to regulate cryptocurrencies thus far because their usage is not so widespread that they could cause systematic risks for Thailand.

There is no central bank in the world that accepts bitcoin, and central banks in the US and Japan are open to opportunities for virtual currencies to be used for payments if recipients are ready to accept them, Mr Veerathai has said.

Singapore's monetary authority warned last week that digital currency buyers should be aware that they could lose all their money, as the recent price surge was driven by speculation.

Singaporean officials joined counterparts who have warned about the speculative mania surrounding bitcoin.

Bank of Japan governor Haruhiko Kuroda has also voiced concern, saying bitcoin is not functioning like a normal means of payment.

Bitcoin's price has swung wildly in the past few months, rallying about 1,700% this year to a record high of nearly US$20,000 (652,500 baht) before a sell-off that began last week sent the cryptocurrency below $12,000.

Bitcoin fell nearly 30% at one stage last Friday to $11,159.93 and, despite a late recovery, had its worst week since 2013, according to Reuters.

Bloomberg yesterday reported that bitcoin resumed its tumble after South Korea said it was eyeing options such as a potential shutdown of at least some cryptocurrency exchanges to stamp out speculation.

South Korea will require real-name cryptocurrency transactions and impose a ban on the offering of virtual accounts by banks to crypto-exchanges, according to an official statement.

Policymakers in South Korea will review measures suggested by justice officials and take proper measures while continuing to monitor speculation.

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