The Securities and Exchange Commission (SEC) of Thailand, which earlier banned the use of digital assets for payments, has expanded its regulations to include digital asset custodial wallet providers among the list of digital asset business operators prohibited from offering and accepting digital assets as a form of payment.

The new regulation, which took effect last week, expands on the regulators’ March 2022 announcement that prohibited the use of digital assets such as cryptocurrency and crypto tokens for payment of good and services, over the concern that the use of such for payments could open up consumers and businesses to unnecessary risks. 

Prior to the new regulations, the scope of ban on payments was limited to certain types of digital asset businesses, but the new amendments widen the regulatory net to address new and emerging players in the sector.

However, in what can be seen as a compromise, the SEC, in the same statement, also says digital asset custodial wallet providers are now welcome to participate in the Programmable Payment Sandbox of the Bank of Thailand (BOT) which was launched last month.

The BOT’s Programmable Payment Sandbox is meant to allow digital asset businesses to experiment with digital financial innovations in the payments space while in a safe environment. 

The updated regulations were announced following an extensive public consultation which began in July 2024.

Other than digital asset custodial wallet providers, the SEC also oversees five other types of digital asset business operators. These include digital asset exchanges, digital asset brokers, digital asset dealers, digital asset fund managers, and digital asset advisory service providers.

The latest regulatory amendments highlight Thailand’s continuing balancing act, which seeks to support digital asset businesses while maintaining financial stability. While digital assets are banned as a means of payment, the SEC has also taken a more friendly regulatory approach towards the new asset class, even approving several cryptocurrency exchanges to operate in the country, including a joint venture between Binance, one of the world’s largest cryptocurrency exchanges, and Gulf Energy Development.

Binance has been banned in several Southeast Asian economies for failing to apply for proper licences to operate.