Facebook’s Project Libra has generated a lot of excitement among cryptocurrency enthusiasts, with some believing that the token will be the final push that places virtual currencies in the mainstream. However, the Libra has also attracted the attention of state regulators, who are unnerved at the prospect of tech giants disrupting global monetary and financial systems.
The situation is no different in Thailand, where the Ministry of Finance has signaled that the Libra would face regulatory hurdles. According to a report by local news outlet The Bangkok Post, a state financial policy expert has said that the Libra does not fit existing legal definitions for currencies.
According to Sumaporn Manason, a legal officer of the Ministry of Finance’s Fiscal Policy Office, cryptocurrencies in Thailand do not constitute legal tender according to the Bank of Thailand’s Currency Act.
Under the Currency Act, legal tender is defined as a banknote or coin with value in Thai Baht or identifiable as an object or note used to pay debts or exchange with other currencies in accordance with the law.
Sumaporn explained that the Libra is not a tangible payment medium and, moreover, fails to fit any definitions in related laws, such as the Payment Systems Act.
Libra’s creators announced that the token is designed to be a stablecoin, meaning its price would not wildly fluctuate like other virtual currencies, such as Bitcoin or Ether. The value of Libra will be backed by a basket of currencies.
Money spent to purchase Libra will be stored in a reserve used to back the value of the virtual currency. Therefore, the value of Libra will correlate with major stable currencies, like the US Dollar and the Euro.
Nonetheless, the future of Libra in Thailand remains uncertain. The Bangkok Post reported that according to Supaporn, authorities could enforce an outright ban, no regulation whatsoever, or “regulation through an intermediary.”
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