Stablecoin Thai Baht Digital, created by Terra, has come under fire from Thai bankers. The Bank of Thailand issued a warning against this privately issued stablecoin pegged to the national currency, Thai baht.
The Bank of Thailand warns against THT
According to of Bangkok Post reports On March 18, the central bank informed citizens that Thai Baht Digital (THT) has no legal guarantees or protection and that its users may be at risk of online theft or money laundering.
Referring to the relevant law, the deputy president of the central bank, Pruettipong Srimachand, stated that all activities related to stablecoin are considered illegal.
– The creation, issuance, use or circulation of tokens violates Section 9 of the Currency Act 1958. – He said.
Stablecoin is broadcast on the Terra platform. This one created various other stablecoins, including TerraUSD, first aired in September 2020, and TerraKRW. It stands behind the Chai payment app, a stablecoin powered e-commerce wallet that is widely used in Asia.
THT is related to Thai baht. This in turn raises concerns that the project could “fragment” the national currency system if the stablecoin tries to compete with the currency issued by a central bank. Pruettipong added that Such use [stablecoina] it would ultimately affect the confidence of the general public in the stability of the national monetary system, which is the cornerstone of all economic activity. ‘
Terra was founded in 2018 in South Korea and started operating with $ 32 million in support from Binance and Polychain. In January 2021, the company behind the platform, Terraform Labs, raised $ 25 million in a new funding round, including from Galaxy Digital, Coinbase Ventures and Pantera Capital.
Governments are afraid of stablecoins
The Thai government is approaching stablecoins and cryptocurrencies much like the authorities in China, where the central bank is working on digital yuan. China has accelerated its CBDC to market program by commencing further testing of the project’s infrastructure. Reportedly, the digitized yuan will appear on the market even before the Winter Olympics in Beijing. These are to take place in 2022.
The Bank of Thailand also accelerated its own research on the national CBDC, announcing on February 23 joint work with Hong Kong’s monetary authorities, the Central Bank of the United Arab Emirates and the People’s Digital Currency Institute.