The Bank of Thailand (BoT) issues a strict warning on Wednesday against Thai Baht Digital (THT). It is a baht-denominated stablecoin. It warned people not to make any investment in it. As per a Bangkok Post report on March 18, the BoT has informed the citizens that THT has no legal assurances or protection and that users could be at risk of cyber theft or money laundering. Moreover, the warning precisely mentions about the THT stablecoins. However, it is also applicable to all Thai-Baht denominated digital currencies. The Thai regulator elucidates that THT came into existence on the Terra platform. Moreover, one unit of the THT is denominated in and valued at one Baht.
Terra platform minted THT stablecoin. It has also produced several other stablecoins like TerraUSD and TerraKRW. The platform coins several stablecoins for e-commerce that replicate the value of different fiat currencies. The Terra platform is also developing an e-commerce wallet, the chai payment app, employed mainly in Asia and powered by stablecoins. Moreover, Terra platform first stepped into the market in South Korea in 2018. In January 2021, Terraform Labs raised $25 million in a new funding seed from Coinbase Ventures, Pantera Capital, Galaxy Digital, among others.
THT Stablecoin to reduce reliance on Baht?
THT stablecoin is secured to the national currency (the Thai Baht), increasing concerns that it could create fragmentation of the Thai currency system to contend with the central bank’s baht. It is concerned that the widespread adoption of THT would drain confidence and trust in Baht. As a consequence, it has announced that the usage of THT is illegal. Moreover, it also published a warning to the members to discontinue using THT or engaging in any activity requiring it.
The Bank of Thailand has gained pace in the race towards the development of CBDC. In July last year, the Thai Central Bank affirmed that its CBDC project was under construction, when the nation began the third phase of the development. Moreover, the central bank collaborated with the Hong Kong Monetary Authority to practice the CBDC to test transactions. Thai’s CBDC development will act as a financial innovation that allows higher payment efficiency for businesses, making payment easier and supporting fund transfer flexibility.
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