Bank of Thailand Intensifies Crackdown on USDT and Gray Money Flows

Thailand’s central bank has escalated its oversight of stablecoin transactions as part of a broader campaign against money laundering, illicit finance, and the so-called “gray economy.” The Bank of Thailand (BOT) is collaborating with the Securities and Exchange Commission (SEC) to audit high-volume transactions involving Tether (USDT), cash dealings, and foreign exchange activities to detect and halt suspicious financial flows.

“The measures we are implementing are not short-term fixes; they require the continuous deployment of multiple parallel strategies,” said Bank of Thailand Governor Vitai Ratanakorn, as reported by The Nation on Saturday.

The crackdown primarily targets Thailand’s gray economy—largely composed of untraceable cash potentially sourced from illegal operations such as scam call centers that have surged across Southeast Asia. Although precise data on the gray economy remains elusive, authorities estimate scam-related losses reached 115 billion THB (approximately $3.4 billion) in 2025, accompanied by roughly 173 million recorded scam calls and text messages.

Stablecoins like USDT have gained popularity among bad actors due to their ability to facilitate near-instant cross-border transfers. In response, Thai regulators are expanding compliance obligations for commercial banks to cover cash networks, currency exchanges, gold bullion trading, and what they term “suspicious stablecoin transactions.”

Under the new measures, individuals conducting high-value cash transactions must declare the source of their funds. Additionally, exchanging large volumes of high-denomination banknotes for smaller ones without a legitimate business rationale will be closely monitored. Cash deposits exceeding 5 million THB (about $150,000) now require full disclosure.

Despite its reputation as a crypto-friendly jurisdiction, Thailand maintains strict prohibitions on using digital assets and stablecoins as payment instruments. The central bank has consistently tightened regulations on crypto businesses in recent years. While crypto trading remains legal—with Bitkub, the country’s largest exchange, reporting around $26 million in daily trading volume—nearly 40% of that activity involves forex pairs, particularly USDT/THB, according to CoinGecko.

The intensified enforcement has not been without controversy. In 2025, Thai banks froze approximately three million accounts in an aggressive sweep targeting money mule networks and gray capital. However, the operation inadvertently ensnared thousands of innocent individuals and legitimate businesses, prompting media outlets to label it a “scammer crackdown gone wrong.”