Bitcoin, that strange, new, wholly Internet-generated currency that's been catching on worldwide, just found itself on the bad end of a particularly potent roadblock in Thailand. A Bitcoin startup that was to be based in the country reportedly suspended all its operations following the discovery of said roadblock, which amounted to an effective ban on Bitcoin throughout the country.
Reports indicate that, thanks to a variety of points, the Foreign Exchange Administration and Policy Department in Thailand found Bitcoin untenable—including a complete lack of capital controls, existing laws around the currency, and the fact that Bitcoin “straddles multiple financial facets.” As a result, activities involving bitcoins are now illegal in Thailand. The list of activities now forbidden under Thai law includes buying and selling bitcoins, using bitcoins in any financial transaction either for buying or selling goods, and both sending and receiving bitcoins to or from anyone in Thailand.
Further information about the ban, including when it takes place and what motivated the authorities to put it in place, is short on the ground as of now, with the Bank of Thailand reportedly not yet commenting on the issue. But this looks to be the first time any country has made such an overt move against bitcoins.
George Mason University's senior research fellow at the Mercatus Center, Jerry Brito, reportedly told Ars Technica, “A ban would not surprise me since Thailand has never been shy about censoring the Internet in the name of public order and morals.”
Image via RT.com
Perhaps even less clear is just how Thailand intends to enforce such a sweeping ban on an Internet product like bitcoins. Since bitcoins are essentially just a number, being able to spot people trafficking in numbers doesn't exactly seem like the kind of thing that would be easy to do. Thailand's reasoning doesn't seem the greatest, either, with concerns over currency controls and the lack of applicable laws being odd reasons to completely shut down an operation.
Of course, this is Thailand, and Thailand's cultural decisions are ultimately Thailand's responsibility. But it may well prove to be the start of a series of similar decisions that may well ultimately remove the bitcoin from commercial viability; if no country permits its citizens to traffic in same, either outgoing or incoming, the end result is that the currency is effectively useless. This may have some notable impact on mobile commerce, as removing an option entirely from the table could slow down some buyers who would have used same in the course of normal commerce, but since for now it's just Thailand going this route, the effects are likely to be negligible in the short term.
It's something of a distressing development—choice should be everything in the markets, and government intervention is always a drastic step—but it's also likely to not be the first such development there is. Chances are more countries will take Thailand's lead on this one, and the bitcoin may soon be a currency without a home.
Edited by Alisen Downey