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.
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.
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.
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.
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.
>> 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 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?
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.
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.
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.)
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.
[+] [-] mrb|12 years ago|reply
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.
[+] [-] dobbsbob|12 years ago|reply
[+] [-] nikster|12 years ago|reply
Thanks I was just about to write that.
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?
[+] [-] tpatke|12 years ago|reply
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?
[+] [-] 3am|12 years ago|reply
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.
[+] [-] wtvanhest|12 years ago|reply
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.
[+] [-] anologwintermut|12 years ago|reply
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.
[+] [-] baddox|12 years ago|reply
[+] [-] jerguismi|12 years ago|reply
Especially in countries with highly inflatonary currencies, or countries with strong currency controls, the black market demand for Bitcoin could be huge.
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] genwin|12 years ago|reply
[+] [-] cs702|12 years ago|reply
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.
[+] [-] wmil|12 years ago|reply
http://en.wikipedia.org/wiki/Executive_Order_6102
There are already many limitations on currency, this can last as long as the others.
This is actually arguably good news for Bitcoin. The government of Thailand sees it as a feasible way to bypass currency controls.
[+] [-] gamblor956|12 years ago|reply
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.
[+] [-] Nursie|12 years ago|reply
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.
[+] [-] lrem|12 years ago|reply
[+] [-] anigbrowl|12 years ago|reply
Putting BTC and the USD on the same plane for comparison is likely to result in errors.
[+] [-] eternauta3k|12 years ago|reply
http://www.bbc.co.uk/news/world-latin-america-15532101
[+] [-] scotty79|12 years ago|reply
[+] [-] mjn|12 years ago|reply
[+] [-] novaleaf|12 years ago|reply
[+] [-] dreen|12 years ago|reply
[+] [-] mjn|12 years ago|reply
[+] [-] Nursie|12 years ago|reply
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.
[+] [-] RuggeroAltair|12 years ago|reply
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?
[+] [-] murbard2|12 years ago|reply
[+] [-] tomelders|12 years ago|reply
[+] [-] helterskelter7|12 years ago|reply
[+] [-] VMG|12 years ago|reply
[+] [-] znowi|12 years ago|reply
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.
[+] [-] crusso|12 years ago|reply
[+] [-] eksith|12 years ago|reply
How does banning bits in any way shape or form, prevent their transmission and storage?
[+] [-] dragonwriter|12 years ago|reply
[+] [-] coldtea|12 years ago|reply
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.
[+] [-] PeterisP|12 years ago|reply
[+] [-] kristiandupont|12 years ago|reply
[+] [-] bayesianhorse|12 years ago|reply
[+] [-] AndyKelley|12 years ago|reply
[+] [-] northwest|12 years ago|reply
EDIT: ...which probably means that sooner or later, bitcoin will probably be outlawed everywhere.
[+] [-] dobbsbob|12 years ago|reply
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.
[+] [-] erikpukinskis|12 years ago|reply
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.
[+] [-] DigitalSea|12 years ago|reply
[+] [-] Articulate|12 years ago|reply
[+] [-] rplacd|12 years ago|reply
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.)
[+] [-] biot|12 years ago|reply
Bitcoin == Tax evasion
[+] [-] socrates1998|12 years ago|reply
Thailand might be more sensitive to currency issues than other countries.
They were told to float their currency on the international market and it backfired horribly in the 1990's.
I can see why they would want to be worried about currency manipulations again.
[+] [-] unknown|12 years ago|reply
[deleted]
[+] [-] Sealy|12 years ago|reply
And I agree with the other comments on here which say that this will drive trade (in Thailand at least) underground.
Disclaimer: I'm bullish on bitcoin.
[+] [-] guard-of-terra|12 years ago|reply
Switz might be an exception, or Iceland perhaps, but both too constrained by neighbours and political bonds.
[+] [-] possibilistic|12 years ago|reply