Bank of Thailand Closes In On USDT 'Grey Money' Flows Amid Regulatory Crackdown

The Bank of Thailand has intensified its monitoring of Tether (USDT) transactions after identifying that 40% of sellers on local platforms are non-residents. The move is part of a broader campaign against grey money flows that also includes cash movements, gold trading, and e-wallet transactions according to reports.

Governor Vitai Ratanakorn stated that foreign traders are operating in the country's crypto space in ways that 'should not be trading,' prompting closer scrutiny of stablecoins according to analysis.

The domestic crypto market, with a daily trading volume of 2.8 billion baht, is being reviewed alongside the larger foreign exchange market as reported.

On January 9, Prime Minister Anutin Charnvirakul issued a directive for stricter reporting requirements and enforcement of wallet identification rules across digital assets and gold trading. The measures are part of a coordinated effort involving the Bank of Thailand, the Revenue Department, and other agencies according to the directive.

Why Did This Happen?

The central bank's actions follow growing concerns over grey money flows, particularly through stablecoins. The total stablecoin supply now exceeds $292 billion, with Tether accounting for about 64% of that total according to Chainalysis.

Chainalysis reported that stablecoins accounted for 84% of illicit cryptocurrency transactions in 2025, reaching a lower-bound estimate of $154 billion. This has prompted global regulators to tighten oversight, with Thailand's approach reflecting a broader trend as noted.

Tether has responded by freezing more than $3 billion in USDT to assist law enforcement, working with 310 agencies across 62 jurisdictions. Despite these efforts, the company remains under scrutiny for its role in Venezuela's economy, where it has been used to circumvent U.S. sanctions according to reports.

How Did Markets React?

The Bank of Thailand is also seeking to expand its authority over online gold trading, which has a significant impact on the baht. Governor Vitai Ratanakorn mentioned that daily gold trading volumes in Thailand can surpass those on the local stock exchange, with gold-related deals accounting for 50% to 60% of total dollar trading according to Bloomberg.

The central bank plans to introduce a daily trading cap of 50 million to 100 million baht per person for online gold transactions. These measures are intended to curb speculative activity without affecting retail investors or jewelry manufacturers according to the plan.

Authorities are also considering new business taxes and stricter audit requirements for online gold trading platforms. The goal is to close loopholes exploited by criminal networks that move and store value outside the banking system as reported.

What Are Analysts Watching Next?

Thailand's broader regulatory approach includes the enforcement of the Travel Rule, a global AML standard requiring crypto service providers to collect and transmit sender and recipient information for certain transactions according to analysis.

While no official reports indicate a ban on self-custody wallets, stricter enforcement may indirectly affect withdrawals. Exchanges may impose enhanced verification or tighter controls to comply with reporting requirements according to industry sources.

The central bank plans to establish a national data hub for real-time monitoring and risk profiling of suspicious activity. This hub will help integrate efforts across different asset classes and agencies according to reports.

Looking ahead, the Bank of Thailand may seek further legal amendments to strengthen its oversight during the upcoming general election. Governor Vitai emphasized the need for structural solutions to prevent long-term macroeconomic instability as stated.

Thailand's approach to crypto and gold regulation reflects a shift toward a data-centric enforcement model. By treating digital assets and traditional financial channels as parallel concerns, the country aims to close regulatory gaps and enhance transparency according to analysis.