SEC says stablecoin won't be employed as fundraising tool

SEC says stablecoin won't be employed as fundraising tool

The Stock Exchange of Thailand's (SET) stablecoin is to be used as an e-payment medium for clearing and settlement and not a fundraising tool, says a senior official at the Securities and Exchange Commission (SEC).

Such a stablecoin will help reduce the clearing and settlement period of securities and lower transactional cost, which is normally done through the banking system, said Supa Thamthitivat, director of the market supervision group at the SEC.

Stablecoins are a type of cryptocurrency designed to minimise price volatility by pegging their value to another cryptocurrency, fiat money or exchange-traded commodities.

At present, the clearing and settlement period of securities are completed within two working days, but the period could be reduced substantially if the bourse's stablecoin could be used, Ms Supa said.

The digital cryptocurrency could also offer greater flexibility for clearing and settlement, she said.

The expectation is that the SET will be an intermediary for converting the baht's value into a stablecoin for securities clearing and settlement, Ms Supa said.

Recent reports said the SET had floated the idea of launching a digital stablecoin to be used domestically at first before expanding into Cambodia, Laos, Myanmar and Vietnam if the asset takes hold.

The digital coin idea was proposed to the SEC several months ago, according to SET president Pakorn Peetathawatchai.

"I would like to reiterate that it's still just an idea," he said. "We are thinking about new ways to make [securities] trading easier and it is under the SEC's consideration. Technology changes faster than people think."

Prinn Panitchpakdi, country head of CLSA Securities Thailand and a former member of the SET's board of governors, said the SET's stablecoin is a good idea because the use of cash to pay for goods and services is expected to decline.

A faster clearing and settlement period of securities will allow investors to open a single securities account for trading in the equity markets worldwide, which could occur in the future, Mr Prinn said.

But the SET's new board of governors, expected to be finalised on Aug 20, could review the idea again, he said, adding that issues related to cybersecurity and legal compliance must be examined further for the idea to bear fruit.

Separately, parties involved with digital asset transactions of more than 5 million baht will have to report their trades to the Anti-Money Laundering Office (Amlo).

Local digital asset exchanges will be required to report digital asset trades with a value exceeding 5 million baht to commercial banks, then banks must report such transactions to Amlo, said acting secretary-general Preecha Jaroensahayanon.

The Finance Ministry will issue an additional clause in the digital asset royal decree on the compulsory practice, expecting to take effect in early August, Pol Maj Gen Preecha said.

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