Thailand wants to limit crypto transactions: new rules for USDT

Thailand intends to introduce stricter regulations for stablecoins such as Tether (USDT) and USD Coin (USDC). In the future, investors may only be allowed to deposit and withdraw a limited amount per day through regulated crypto platforms. The regulator also wants to prevent users from transferring cryptocurrencies directly to other people's wallets. The measures are intended to combat money laundering, cybercrime and illegal international money flows.

On Thursday, November 12, the Thai Securities and Exchange Commission (SEC) presented new proposals for the supervision of stablecoins.

According to the plan, customers are allowed to deposit up to five million Thai baht in stablecoins per crypto platform per day and withdraw the same amount. That amounts to approximately $148,000 per direction. The limit applies per customer, per provider. Deposits and withdrawals are counted separately.

In addition, crypto platforms must verify that the size of transactions is commensurate with their customers' income and financial circumstances.

Another important change is that customers are only allowed to receive or send stablecoins through regulated providers to or from wallets that can be proven to belong to them.

Transfers to wallets belonging to other individuals are prohibited within this service. This does not mean that Thailand prohibits all direct transactions between independent crypto wallets. The proposal focuses on transactions that are processed through regulated crypto companies.

The Thai regulator also wants to require crypto companies to collect more information about their customers and transactions. In doing so, providers must comply with the so-called Travel Rule. This requires financial institutions to verify information about the sender and recipient for certain crypto transactions.

Crypto companies must also use blockchain analytics to detect suspicious wallets and possible links to criminal activities. There will be exceptions to the daily transaction limit.

For example, customers without this restriction are allowed to transfer stablecoins between their own accounts with regulated Thai providers, as long as both parties comply with the Travel Rule. Certain business transactions, approved token issuances and activities of professional liquidity providers are also exempt.

The proposals go beyond stablecoins alone. From now on, crypto exchanges must disclose which parties provide liquidity and for which cryptocurrencies they do so.

In addition, they need to investigate more thoroughly where these parties’ funds come from. For crypto brokers, the SEC wants to prohibit the use of external liquidity providers in trading pairs between stablecoins and the Thai baht.

The regulator also proposes to allow certain transactions outside regular trading platforms only from three million baht, approximately $88,500. Providers must also publish their trading prices.

The rules are not yet final. The SEC will be collecting feedback from citizens and businesses until November 26. After that, it will be decided which measures will actually be implemented.