Bank of Thailand sets up a unit to study Libra ahead of legislation

Libra was renamed Diem and the project was wound up in 2022 without ever launching, so the legislation discussed here was never needed. This article is from July 2019 and is kept as written.

Not long ago Facebook released news big enough to shake the world of finance and economics, with the launch of the digital currency Libra, which applies blockchain technology to make cross-border transfers considerably more convenient — fast, and with very low processing fees. Not long after the launch, however, a number of government bodies wrote to Facebook asking it to slow the development of Libra so that the various consequences could be assessed, both in law and in relation to use for illicit purposes. Jerome Powell, chairman of the United States Federal Reserve, has been following this digital currency closely because of the number of issues involved, from financial stability in protecting consumers through to the technology being used for purposes it was not intended for, such as money laundering and financing terrorism.

Thailand is among the heaviest users of Facebook in the world, so Libra is naturally a significant issue that many parts of the Thai government are paying attention to. The Bank of Thailand and the Securities and Exchange Commission are working quickly to study it and issue legislation that is fair to all parties.

The Bank of Thailand has also revealed that Facebook approached it directly to consult on the matter. Facebook is trying to push Libra into genuine use internationally, and Thailand is certainly one of the markets Facebook has taken an interest in for marketing this digital currency.

That said, because Libra is a fairly new subject — and although a white paper has been published for study, it is found to contain a great deal of technical material — it will take time and people with specialist expertise to understand it before legislation on this digital currency can be drafted. The Bank of Thailand has therefore set up a unit specifically to study the matter, working across a number of sectors, because the Bank is also trying to push Thai financial innovation forward, in order to help startups and online commerce advance internationally.