The Stock Exchange of Thailand (SET) and the Ministry of Finance have warned Thai investors against investment in digital currencies as risk remain high and they would have to shoulder their own risk in case of loss.
Warning from the two state agencies came after an international fund management company, Phillip Capitals, has officially introduced itself as overseas broker in Thailand for Bitcoin futures.
The firm announced that it will be providing brokerage service on Bitcoins in Thailand for futures trading in the Chicago Mercantile Exchange (CME).
Reacting to the announcement, the state agencies came out to advise against investing in such a risky commodity, saying that being the first company in Thailand to provide brokerage services for Bitcoin does not guarantee security on investment as the central bank still does not recognize Bitcoin as a legally binding commodity of exchange.
SET president Kesara Manchusree said that Thai investors are entitled to invest in overseas commodities markets that recognize Bitcoin such as the CME.
But she said though the government has posted no restrictions on making such investments abroad, investors must be informed of all the details involved and realize that they would be shouldering the risks entirely on their own.
She said currently there are two commodities markets backed by the US government to trade in Bitcoin.
But she said what concerns many specialists are their extreme volatility that could easily result in complete loss of investment.
She asked if investors could realistically accept this level of risk while also facing the likelihood of being forced to put up collateral on a daily basis.
Meanwhile the Fiscal Policy Office's Financial System and Financial Institutions Policy Bureau executive director Mr Pornchai Thiraveja said extreme care must be exercised when dealing with digital currencies which are highly volatile and risky.
He said the government does not recognize such currencies due mainly on the fact that the value of investments made in such currencies is based entirely on the needs of individual buyers and sellers and does not comply with economic fundamentals.
Speculation will be high, making the risk of complete loss a real possibility, he said, adding that investors may unwittingly become accomplices in money laundering operations or become entangled in money laundering for such investment.
Source: Thai Public Broadcasting Service (Thai PBS)