Thailand has announced that it is banning the use of cryptocurrencies as a means of payment for goods and services.

The Securities and Exchange Commission (SEC) announced on Wednesday that the ban will come into effect from April 1.

“The SEC issues rules for providing services to digital asset operators in order not to support or promote the use of digital assets as a means of payment for goods and services in order to prevent impacts on financial stability and the national economy,” the regulatory body said on its website. 

However, the regulator explained that trading or investment in cryptocurrencies is exempt from the new rules. 

The ban comes two months after the regulator, the Bank of Thailand and the Ministry of Finance said that they planned to ban the use of crypto for payments to avoid financial instability and economic system risks.

Earlier this month, Thailand’s government also relaxed tax rules for crypto investors, allowing them to negate annual crypto losses against gains and get a value-added tax exemption of 7 per cent for trading on authorized exchanges. The parliament also endorsed tax breaks for direct and indirect investments in startups.

Thailand plans to test run its central bank digital currency (CBDC) later this year as an alternative means of payment for the public. The CBDC project has been underway since 2018. Named Project Inthanon, the project is reviewing the use of the digital Thai baht for cross-border payments.