Supervision of financial business groups of commercial banks that operate businesses and transact digital assets

Digital Asset plays an important role in contributing to the development of innovative financial services that benefit consumers and the economy as a whole. However, digital assets are exposed to risks in many forms, especially in cases where consumers have insufficient understanding of digital assets, and are also at risk of being used as a tool for money laundering or terrorist financing. .

In order to balance the support of innovations related to digital assets of the financial business groups of commercial banks for the benefits and risk management that may arise, it is important that the Bank of Thailand improves and defines the relevant rules for operations. business and related transactions. to Digital Asset to be more flexible and to allow discrete investments and business relevant to Digital Asset under the rules and ratio of investment in Digital Asset Business as needed.

Therefore, the Bank of Thailand has issued Bank of Thailand Notification No. SorNorSor. 6/2565 on Regulation on Supervision of Financial Business Groups of Commercial Banks that Operate Activities and Perform Transactions in Digital Assets (“Notification”) which comes into force on October 22, 2022 and applies to commercial banks, parent companies, subsidiaries and affiliates of commercial banks in financial business groups in accordance with the business law of financial institutions with key principles such as : (1) enable businesses in financial business groups, except commercial banks, to quietly operate a digital asset business under flexible regulations, and support technology or financial services development to increase the efficiency of the financial system for the benefit of people, businesses and the economy; (2) overseeing and managing the risks associated with digital asset transactions; (3) to protect consumers and for consumers to receive fair services; and (4) raise the business standard of digital assets.

This notification stipulates that commercial banks may conduct transactions in digital assets but may not operate a digital asset business, and financial enterprise group companies may operate businesses and conduct transactions in digital assets as prescribed in this notice without violating the key principles of this notice and other relevant laws. from Thailand and internationally, such as prohibiting the use of digital assets as means of payment or encouraging the general public to hold digital assets. However, these transactions are subject to the objective of developing innovations to increase the efficiency and quality of the provision of financial activities.

In addition, this Notification also specifies the principles of risk management governance in the following areas:

  1. Limit the amount of credit, invest, create contingent liabilities or perform transactions similar to digital asset related business loans (Digital Asset Related Business Limit)
  2. Monitoring of good governance
  3. Capital Maintenance
  4. Cash maintenance
  5. Classification and Provisioning
  6. Supervision of large debtors
  7. Risk of intra-group contagion
  8. Official supervision (prudential control process)
  9. Disclosure
  10. Know Your Customer: KYC
  11. Consumer protection

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