CENTRAL bank chief Veerathai Santiprabhob has urged the government to speed up an overhaul of regulations required for the digital economy.
In a speech at a forum on financial technology (fintech) hosted by Matichon Group yesterday, Veerathai took aim at the tangle of obsolete regulations that were obstructing companies as they transitioned their operations in the digital era.
The Bank of Thailand governor said Thai business laws and regulations were still anchored in the past, when commercial contracts and financial transactions could only be completed with the required paperwork, typically involving many stages of approval. Citing the advent of secure electronic methods for financial transactions, Veerathai said the dated legal structures now imposed higher costs on businesses and eroded productivity in both the public and private sectors.
Veerathai said that Thailand should learn from South Korea, which has undertaken comprehensive reforms to establish a highly successful digital economy.
He said the Bank of Thailand has opened its doors to outside experts, such as fintech firms, to help it conduct financial business more efficiently, as well as allowing banks to provide fintech products and services.
More fintech products and services would be approved by the central bank over the next few months, Veerathai said. Some of these would be tested under the BOT’s regulatory sandbox, he said.
However, the central bank chief was cautious on Thailand approving the use of bitcoin as a legal means of payment. He cited the virtual currency’s extreme volatility as posing a risk for people who hold it.
Caution on bitcoin
Japan and a number of other countries have legalised bitcoin as means of payment. But Japan’s financial system operates in a different environment to Thailand’s, he said, noting that Japan has several exchange markets that accept bitcoin transactions.
Finance Minister Apisak Tantivorawong said the government would take into account the risks stemming from bitcoin and other digital currencies in assessing whether to legalise them. He added that the BOT was studying the pros and cons of bitcoin use.
Bitcoin is circulated directly from peer to peer via blockchain technology without any controls by central banks or governments. This is seen as adding to the risk for investors buying into it or holding on to it as a financial asset.
The World Economic Forum has rated Thailand poorly on its digital competitiveness, despite the government’s Thailand 4.0 policy aimed at upgrading the country’s technological base. Thailand’s digital competitiveness ranking dropped to 41 this year from 39 last year, in the WEF”s assessment of 63 economies. Thailand lagged in many areas, including e-government, with the report citing widespread software piracy, poor IT education and training, and a lack of digital and technological skills.
Critics also blamed Thailand’s newly enacted computer crime law, which they claim is designed to suppress freedom of expression and will spook investors considering putting money into IT-related business here.