LUNA raises alarm? Bank of Thailand announces that stablecoin "THT" violates the Currency Act.

Despite the recent positive news of its fixed-rate protocol Anchor Protocol ANC going live, the Bank of Thailand has issued a stern warning, claiming that the Thai Baht stablecoin THT issued by the decentralized stablecoin protocol Terra violates the Currency Act and may face risks of online theft and money laundering.

What is the stablecoin protocol Terra LUNA

Terra was founded in 2018 and is a blockchain project from South Korea with strong backing from investment institutions:

Terra is a stablecoin protocol that issues various stablecoins, such as the U.S. dollar UST, the South Korean won KRT, the International Monetary Fund Special Drawing Rights SDT, and the Thai baht THT, by anchoring its native token LUNA.

Bank of Thailand Issues Warning

According to a March 18 report by the Bangkok Post, the Bank of Thailand has warned the public against using the THT stablecoin, stating that the asset is not legally protected and users may face risks of cyber theft and money laundering.

Bank executive Pruettipong Srimachand quoted longstanding laws to emphasize the illegality of THT:

Creating, issuing, using, or circulating any form of token in the form of money violates Article 9 of the 1958 Currency Act.

The central bank pointed out that private companies are attempting to create cryptocurrencies anchored to underlying assets or fiat currencies, and the THT anchored to the Thai baht has raised concerns. Competition with the central bank's currency could potentially lead to a fragmentation of the Thai currency system, shaking public confidence in the Thai baht.

Terra Founder: They Will Eventually Adopt It

Despite facing regulatory issues, Terra founder Do Kwon openly shared the Bank of Thailand's announcement on Twitter and defended Terra's innovative technology:

They always fear before joining, and Terra is now strong enough to make the central bank vigilant. Whether the Bank of Thailand likes it or not, THT will eventually be adopted.

https://twitter.com/d0h0k1/status/1372387731322540034

Do Kwon appears unconcerned about the situation. When some netizens expressed concerns about potential legal risks, Do Kwon even mocked:

I only found out today that Thailand has a functioning central bank. We're fine, no problem.

In fact, according to data from Terra Station platform, only 16,578 units of THT have been issued, which is worth less than NT$20,000, and it is unclear why the Bank of Thailand issued such a statement.

LUNA has surged nearly 300% from March to date. The launch of Anchor Protocol ANC on 3/17 did not boost LUNA, and its price is still hovering around $18, a distance from the historical high of $20.8 set on 3/16.