Bitcoin was not ruled illegal. The Bank of Thailand has no legal power. A few senior members of the bank saying something is illegal does not make it illegal. The Foreign Exchange Administration and Policy Department are merely departments of the bank, not branches of the legislative government.
In other words the title "Bitcoin ruled illegal in Thailand" should be changed to "Bank of Thailand wishes Bitcoin to be illegal", or "Trading suspended due to Bank of Thailand advisement" which is the original title.
Indeed.. upon closer inspection all that happened is this guy approached the Bank of Thailand and (foolishly) deferred to their authority to ask if he could trade coins using their bank. This always results in bankers telling you no, and no surprise they said no, but doesn't mean you can't use cash on the streets, just so long as no banks are used. Thai parliament hasn't passed any laws declaring virtual currencies illegal.
This story smells. If you go up to some officials in Thailand and ask them whether or not something is legal, they'll say it's illegal.
No laws have been passed that would make BTC illegal, and nobody has been charged with BTC related activity. So I'd say at this point, it's perfectly legal.
Might be just a stunt to get attention?! Viral marketing?
The key factor to the success of any currency is liquidity. You are only willing to put money in if you can take money out. If the government of Thailand says it is illegal to transfer money in or out - that will effect liquidity in Thailand. How will this be enforced? First, banks and reputable institutions doing business in Thailand will not be allowed to trade with companies involved in bitcoin exchange. Of course, this will not completely stop currency conversions, but it will act to decrease liquidity which will act to discourage people from putting money into bitcoins – further decreasing liquidity.
This is definitely bad news for bitcoins.
[Edit] Will a down-voter kindly explain to me how this is good news for bitcoins? Maybe liquidity is not important for a currency?
To the point of your edit, you see identical behavior on Gold investor boards in the typical sites (Motley Food, Seeking Alpha, et al). Everything is good news for gold. If "A" is good for gold, so is "!A". This money flowing in to ETF, inventory levels, chart technicals... almost anything. In the event that something is difficult to justify immediately as good news, it is the product of a malicious conspiracy (market makers, central banks).
I'm only comparing the group dynamic and the hostile reaction to any suggestion that triggers cognitive dissonance. I haven't checked the chart on Mt Gox in ages, last I saw 1 BTC was ~ 125 USD. As a disinterested observer, this Thailand development doesn't seem very important one way or the other, but it's hard to interpret as positive.
For what it's worth, I see identical behavior with stock market enthusiasts as well. Good job numbers? Market goes up. Bad job numbers? Market goes up -- clearly Ben Bernanke must keep printing until employment stabilizes. "A" is good for the stock market and so is "!A." It really is a crazy time we live in. Cognitive dissonance everywhere you look.
There's nothing necessarily crazy about what you describe. The markets reaction to news that everyone knows is going to be released (that is, we know job numbers will be published at this time on that day, but not what the numbers will be) won't necessarily track the good-ness or bad-ness of the news, because the market will have moved in advance based on the best estimates of those playing that game, and they might have overshot.
Given all the financial scandals and outright fraud that have been revealed over the years, you still feel that legitimate concerns of gold investors are nothing more than wild conspiracy theories?
I'm not making fun of gold investors. Why do you feel that I am? Nor did I make any statement about the place of gold in an individual's investment strategy. I'm observing a behavior in a small subset of gold investors, and comparing it to a small subset of Bitcoin enthusiasts.
I don't own any bitcoins, nor do I see myself owning any bitcoins for a long, long time, if ever.
Its bad news for bitcoin, but it is very minor bad news. Bitcoin only needs to be legal in the US or Europe for it to work world wide eventually.
Just imagine a time 30 years from now and a company wants to manufacture something in Thailand (lets say it is product as big as the iPhone was in the early 10's.) and that company would like to pay in Bitcoins. Do you think that that government of Thailand is going to keep up their ban?
Of course not, if Bitcoins get big in a few other countries, that is all that matters.
[Edit] Taiwanese replaced with Thailand. Not sure how I made that error.
Is US currency legal(not legal tender, but actually legal to use) all of the place's it's used?
Of course, US currency is used because it's more stable than the local currency (which bitcoin probably isn't) and it's physical, you can't block it by blocking network traffic.
Liquidity is obviously a good thing for a currency, and on the surface this is obviously a bad thing (at least for Bitcoin users in Thailand), but it's definitely not the key factor to the success of Bitcoin. In fact, a lot of the driving force behind the Bitcoin community is counter-economics (e.g. black markets) and the desire for an alternative to government currencies. In that context, governments outlawing Bitcoin may very well be a positive thing for Bitcoin, because it could be perceived as vindication of the need for currencies which are free from governments.
Bad news probably for mainstream market adoption, but I don't agree that negative legislation necessarily removes incentives to buy bitcoins/drives the Bitcoin value down. Black market status has increased the price/value of certain goods, such as drugs.
Especially in countries with highly inflatonary currencies, or countries with strong currency controls, the black market demand for Bitcoin could be huge.
My understanding is that drugs are expensive mostly because of the risks involved in drug trafficking. I doubt you'll see the same kind of risk premiums in a bitcoin market.
When a the gov't forbids something that seems victimless it's usually for the the benefit of the few, against the general public. Thais should now have more interest in bitcoin like Americans did for gold when that was illegal to own in the US.
Thailand's "Foreign Exchange Administration and Policy Department" has advised that, quoting from the OP: "the following Bitcoin activities are illegal in Thailand: buying Bitcoins; selling Bitcoins; buying any goods or services in exchange for Bitcoins; selling any goods or services for Bitcoins; sending Bitcoins to anyone located outside of Thailand; receiving Bitcoins from anyone located outside of Thailand."
We can get a sense of how successful and lasting this edict will be with a simple mental experiment: replace "Bitcoin" with "US Dollar." The edict thus becomes: "the following US Dollar activities are illegal in Thailand: buying US Dollars; selling US Dollars; buying any goods or services in exchange for US Dollars; selling any goods or services for US Dollars; sending US Dollars to anyone located outside of Thailand; receiving US Dollars from anyone located outside of Thailand." How successful could that edict be, and how long could it last, realistically?
Foreign exchange controls are normally difficult to implement and enforce. Control of Bitcoin -- a decentralized, optionally anonymous, virtual commodity -- should be even more difficult.
I suspect a lot of Bitcoin trading volume in Thailand will simply go underground.
No need to control Bitcoin itself--they can control the users. That is ultimately more effective, because as with historical foreign exchange prohibitions in other countries have demonstrated, the prohibiting country generally has no control over the prohibited currency.
EDIT: Also, it seems that this is not an actual prohibition. Rather, it is merely a legal advisory memo from the national Bank of Thailand to a Bitcoin company regarding the current legal status of Bitcoin transactions in Thailand. According to the BoT, Bitcoin transactions may not be legal under the current law, so the BoT will not provide banking services to individuals or companies that will use the services for Bitcoin-based transactions or services.
They may indeed go underground. That means that legitimate businesses will have a hard time dealing with them if they deal with them at all.
Make no mistake, even if governments can't stop people trading bitcoin, they can stop it becoming mainstream in the way many BTC enthusiasts seem to want.
I'm not sure it is in their long term strategic interest to push bitcoin underground since that will make bitcoin far harder to tax (declining tax revenues -> increasing taxes and decreasing State power -> more people hiding income = the Greek Syndrome).
It doesn't necessarily matter if it's harder to tax. If the only way to exchange Bitcoins for currency is via face-to-face transactions, 90% of what usefulness it has is eliminated. The remaining use, exchange of a virtual currency for virtual goods and services, is only useful with an easy way to get ahold of a sum of said virtual currency to begin with.
Which is to say, with a sufficiently low volume of BTC being passed around, taxing it becomes as important as making sure you tax cash transactions by roadside fruit vendors or lemonade stands.
This law in the USD version was/is in force in some pretty major parts of the world. It kind of screws up the actual exchange rates - you're paying premium for the illegality. Around the time (80's) I was born you could buy a bottle of vodka for $0.80 in an USD-accepting (high-margin) shop.
I am from Brazil, I remember that in early 1990s here you was the coolest kid in the school if you showed up with a dollar bill (even a 1 USD one).
We had a 2000% inflation, and one of the government attempts to fix it was currency controls. (the fix in the end, was create a new currency that had fixed 1:1 rate with USD, and leave it 1:1 for some years until the 1998 crisis made it necessary to decouple them).
The difference between your examples is the reserve currency status of the dollar. Bitcoin doesn't enjoy this status. If there was an Edict banning Thais from owning or dealing in Icelandic Kronur (say because some Icelander had insulted the monarchy, which Thais are notoriously touchy about) then it would probably last extremely well. Banning the australian dollar (a larger currency, from an economy geographically closer to Thailand) is harder to guess; you probably couldn't ban it completely but it might remain hard-to-find.
Putting BTC and the USD on the same plane for comparison is likely to result in errors.
Especially receiving bitcoin would be hard to detect. You can receive bitcoins without owning a computer. Wallet on pendrive or in encoded attachment to some email on your email account is enough.
- Buying Bitcoins
- Selling Bitcoins
- Buying any goods or services in exchange for Bitcoins
- Selling any goods or services for Bitcoins
- Sending Bitcoins to anyone located outside of Thailand
- Receiving Bitcoins from anyone located outside of Thailand
I think what they mean is that its impossible for a company to do any of the above things legally. Its not possible to enforce this on the individual level.
Yes, as the statement notes, the Thai government didn't seek anyone out, and don't appear to be actively interested in whether people are making Bitcoin transactions. Rather, a company, Bitcoin Co. Ltd., asked the Bank of Thailand for an opinion on the legality of their operations and whether any licenses were needed. The Bank of Thailand responded that such activities can't be licensed under current law. Therefore, Bitcoin Co. Ltd. decided to suspend operations to avoid running afoul of the law.
I think your logic is wrong. The Bank of Thailand clearly stated that such operations are illegal.
They did not say that they cannot legislate it but rather, that they are illegal and must not be carried out. And this is the reason why Bitcoin Co. Ltd. suspended operations. Now what you stated.
I think the text was quite clear.
Yes, that's what my comment indicates: the company inquired whether a license is needed, and whether it could be granted. The Bank of Thailand says that yes, one would be needed (they are engaged in financial services, after all), but under current law cannot be granted (there is no provision for licensing the kind of financial services the company proposes to carry out). Hence, the company decided to suspend operations.
The point is that the initiators of the discussion were a company seeking information about operating as a financial-services company. It wasn't a police-initiated operation, like a raid on an individual buying things with Bitcoin, or something of that sort.
>> Its not possible to enforce this on the individual level.
Why not?
From what little I understand it's pretty easy to spot bitcoin related traffic on a network, transactions in particular. Thailand already has some sort of national filtering/porn censorship set up IIRC.
If the person in question is running a Bitcoin wallet, that is. Receiving and sending via blockchain.info online wallets would require masking website traffic only, and there are lots of ways to do this.
Receiving via offline wallet would be completely untraceable, unless the addresses were know a priori by the authorities. Checking the balance on a web-based blockchain viewer could tip off the watchers, but the same precautions apply here as for the above case.
The important thing here is that the receive-only scheme provides a way around two of the six points mentioned by dreen above: selling goods/services for Bitcoin and receiving Bitcoin from anyone outside the country.
Actually, from that list it looks like running a node and mining would not be illegal. And if you're mining with a pool, make sure the payout is added as part of the generation transaction, not sent as another transaction later.
Actually this brings up a very interesting question I hadn't even considered before:
In terms of bitcoin crossing borders and for the purposes of international commerce - where is a bitcoin?
If someone in the US pays someone in thailand you would (or I would) immediately think a cross border transaction has taken place. But Bitcoins only really exist on the blockchain, right? You don't somehow store them on your own machine, only the means of accessing them (keys in your wallet). And the block chain is everywhere. A transaction is a mathematical change of ownership from one key to another, a wallet merely a collection of keys and previous transaction records (the latter probably able to be rebuilt from the blockchain anyway)...
Noticeably, "mining bitcoins" was not on the list of prohibited activities in Thailand on the article. Of course, mining bitcoins is relatively useless unless you can eventually send, receive, or otherwise exchange them...
If someone proposes this kind of law in the US, would it be compatible with the US Constitution?
It seems to me hard to enforce in some western countries.
How can you enforce people not to buy or sell something, unless you decide it's a scam.
Regulations could be enforced, I suppose, the same way short-selling can be 'paused' in situation in which the market is going crazy or volatility is too high. But unless you use these loopholes I am not sure it would be possible.
Does anyone know of ways to enforce such a thing in the states? Or in any of the western european countries?
>> How can you enforce people not to buy or sell something, unless you decide it's a scam.
Drugs, weapons, precursors/ingredients for those things....
Certainly some of the worst and most controversial parts of modern legal codes in the west, but governments ban stuff they don't like all the time.
Where you're dealing with financial instruments, there is just so much law in place already that it seems to me it would be almost impossible to make a business using Bitcoin and not fall foul of some law somewhere.
Either you say that something is dangerous (as in your example, drugs, weapons... etc), or it has to be considered a scam.
I may be wrong and I would like to understand this better, but I don't see how they can declare it illegal to buy unless they find a loophole (money laundry, etc).
But just saying you're not allow to buy it, without associating with it a motivation (which could eventually be challenged via various Courts), doesn't see easy to me in the US.
It will be interesting to see how actively they enforce this new ruling. Given that paedo-tourists are effectively given a free pass in Thailand I find it odd that Bitcoin would work it's way to the top of the agenda.
The title's misleading: Bitcoin was never sanctioned in the first place - the laws presumably whitelist, rather than blacklist.
I don't think the political will exists, in either case - the political jockeying that currently stands in for the entire totality of both policy and political discourse doesn't leave much space for a quiet and novel campaign like this - I suspect, in fact, that the only thing that has fallen into the above category within the last ten years are CITES violations (drug stings should probably be credited to the DEA.)
Maybe not necessary, but I don't think it's out of place. It paints a picture of what the Thai government deems important and with a country like Thailand, with the issues it faces, comparing this non issue against a real issue makes mockery of Thailand's leadership. And they deserve to be made a mockery of.
I'm not sure where you are getting your information, but it isn't accurate. Paedophiles are regularly sent to prison in Thailand.
There is also some misunderstanding about who declared bitcoin illegal. The Central Bank deals specifically with monetary transactions - and they were asked for their opinion by a private company, and they gave that company their opinion.
That is the extent of what happened. The government of Thailand is not on a crusade against bitcoin.
What I find is that people consider "saying anything offensive" to be an ad-hominem attack, but completely omit very common forms of ad-hominem attacks such as attacks on supposed ideology or bringing or other views and arguing that their views are contradictory -- or arguing against another viewpoint that they hold -- in an attempt to refute their views.
To use a real example I recently saw: "Russ Feingold said the Patriot Act violates the 4th amendment, voted against it, and says we should repeal it; however, Feingold sponsored the McCain-Feingold act -- parts of which were found to have violated the first amendment -- so his argument against the Patriot Act is invalid because he and other liberals also violate the constitution". This is an example of not only an ad-hominem, but also false equivalence, and to-quoque -- but yet I see these arguments commonly asserted and unchallenged.
For the record I do think the grand-parent comment does not constitute a particularly strong argument to me: there's no proof that Thailand fails to punish paedophiles any more than any other country (keep in mind these kind of crimes are grossly under-reported) and even if that is indeed the case, there's no proof that the same dynamic would mean laws against bitcoin would not be enforced.
There is NO reason to bring racist stereotypes into the conversation. The Thai government has many many faults, but being soft on child-sex is not one of them. Thai people love their children as much as anyone else in the world. In fact the United States has poured millions into countries like Thailand and Cambodia to conduct paedophile witch hunts which have railroaded a number of innocent people when they couldn't find the hoards of sex-fiends that people like you think are lurking in the shadows.
This is not to say that the story makes Thailand look good. The ruling elite have a strong tendency to blame many things on foreigners, and since coming out against Bitcoin will effect practically no one in Thailand (which is not exactly a hotbed of Bitcoin usage) they get to blame another imagined foreign threat to the Kingdom and take credit for saving the country. Remember, they made a similar stance against, Open Source Software, not long after the military coup not that many years ago (and like Obama in Egypt, the Bush administration illegally continued to give them military aide without anyone in America even noticing).
I have a different explanation. Like many corrupt Asian governments (and I have lived in Asia for 10y+) they usually abide to this principle: if you discover some new way to make money, we either have to make money too out of it and without doing anything, or you have to stop.
So in this case my theory is that they looked at it and like most computer illiterate governments they thought to stop it until they understand how the game works and start making money out of it themselves. I mean personally.
Expect pretty soon to see some new Bitcoin service to appear in Thailand, with some weird license from the government, and founded (probably indirectly) by some corrupted member of the government or someone from their relatives.
Bitcoin is more than a virtual currency or miners running rigs. It's the first self-sufficient, decentralized, monetary system that renders 3rd party entities like banks obsolete.
At the very least it's an intriguing concept in relation to sociology, economy, and new forms of governance. It's a paradigm shift, and as such, it will meet a lot of misunderstanding and opposition. Particularly from those whose power is at stake - banks and governments.
As once, the idea of equality and democracy shook the kingdoms during the Enlightenment, the idea of Bitcoin, if you look closely, is not far from it.
Bans themselves rarely directly prevent things. What they do is provide for punishment for people found to be doing them, which then provides a disincentive.
The huge-ass 400 pound 6"5 bolybuilder of the 11, bans the use of bitcoins.
3 guys defiantly continue to trade in bitcoins.
The other 7 are not so sure -- they rather stay legal.
When the gorilla guy caughts wind of one the traders, he smashes their heads with a hammer and/or throws them in jail. This make 7 other guys even more reluctant, and even makes 1 of the remaining 2 traders to rethink his actions.
Makes sense? Substitute the gorilla guy with law enforcement.
By fining or jailing you if you are transmitting&storing those bits; or by shutting down your company if you are selling goods or services for bitcoin.
Unfortunately, making child porn illegal is a waste of time if the goal is to protect children from abuse. In reality, though, "protecting children" is a banner under which people grab more abusive power. In my view, everyone who is actively fighting with tertiary effects of a social problem is either stupid or plain evil.
I don't see how the issues are linked. Do they simply stem from a common philosophy, or does a disbelief in information ownership somehow entail inability to punish for possession?
The way I see it, information possession and ownership are the same thing, and neither concept should be recognized by the law.
What does it mean to possess bits? Do they have to be on a physical media on my property? What if I have a network drive? Do they have to be on a server that I have access to? Does that mean that we're all in possession of everything that is made public on the Internet?
There are ways to answer these questions, but I'm not convinced that we have anything to gain from the government doing so.
As far as I remember, the country sets a limit for this. Once a "pseudo" currency reaches that amount (in circulation), it is required to be "authorized" (or not) by the country.
Now that was before bicoin existed. So, probably the laws will soon be re-written to take that into account.
No problem. Start an Okpay exchanger in Thailand and ppl can use it to buy coins.
Thailand is already so corrupt laws are basically meaningless there. If you get caught somehow trading coins then just bribe the cop $100 and walk away.
Bitcoin is a tool. It is useful for some things, and it is not useful for others.
Any country who prohibits, like any country who prohibits any tool, it is putting their residents at a disadvantage. By definition. In those situations where the nail is a Bitcoin, Thai people will have no hammer, but a wrench with which to bang the nail in.
The beauty of Bitcoin is it only needs to thrive in one of the 200+ countries in the world for it to achieve Proof of Concept status. And once it does that, other countries will follow, and eventually any countries who prohibit it will need to allow it to stay competitive.
And so it begins. Thailand is a drop in the ocean, once the US and other countries get on-board then the success of Bitcoin is only going to be further propelled. I presume most Bitcoin transactions will go underground and given their anonymous and decentralised nature, good luck enforcing laws like this or even being able to draw conclusive proof of Bitcoin usage to a particular entity (unless you find other proof like receipts, emails or having the Bitcoin client on your computer).
The phrase "this is Thailand" comes to mind - individual use will slip through the gaps, institutional users'll work this into their standard relationships with the various organs of government; and general apathy will reign in the end - the various arms of government are still probably embroiled in the omnipresent issues of either (a) a general political amnesty or (b) politically-motivated point-scoring.
No campaign exists, and there exists no space to whip one up considering how thoroughly split the various arms of government are between political allegiances (unless Yingluck's dealt with the judiciary already.)
A much worse nightmare for tax collectors is an anonymous currency (such as cash). With Bitcoin the tax collector (and everyone else) can review the blockchain and verify that every account payed the taxes it owes. If they find an account that has not payed taxes, they can look at who payed into that account, and who that account payed, and use investigative techniques (IE ask amazon for the address that kindle was shipped to) to discover the indentity of the account holder.
The biggest mistake the Government can make (as a tax collector) is killing Bitcoin, as that will only increase the likelihood that a more anonymous currency will take its place.
Maybe another government called in a favor for Thailand to be the first to ban the currency? (Wild speculation.) If so, I wouldn't imagine that other nations will be long behind.
In other words the title "Bitcoin ruled illegal in Thailand" should be changed to "Bank of Thailand wishes Bitcoin to be illegal", or "Trading suspended due to Bank of Thailand advisement" which is the original title.