Thai Banking Freeze Cripples Jewelers and Gem Traders

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Gems News:  Nationwide Crisis with Global Ripple Effects Thailand’s jewelry and gemstone industry, long regarded as one of the cornerstones of the nation’s export economy, is now facing an unprecedented crisis. A sweeping crackdown by the Bank of Thailand (BOT), aimed at dismantling scam networks, has led to millions of frozen bank accounts across the country. Officials insist these actions are necessary to disrupt so-called “mule accounts” used by fraudsters, but the measures have spiraled out of control, ensnaring innocent citizens, foreign residents, and thousands of businesses—including jewelers, gem cutters, and small-scale traders.

Jewelers and gem traders across Thailand struggle as frozen bank accounts halt payments and disrupt cross-border trade
Image Credit: AI-Generated

The fallout has shaken confidence in Thailand’s financial system. As frustration grows, many in the gems and jewelry trade warn that the very foundation of their businesses—fast, reliable transactions—has collapsed overnight. This Gems News report highlights how jewelers, gemstone traders, manufacturers, and even cross-border suppliers are being suffocated by account freezes, with livelihoods, exports, and the nation’s reputation as a global gem hub at stake.

Small Jewelers Struggling for Survival

The BOT reports that in just the second quarter of 2025, Thailand lost around 6 billion baht (approximately USD 160 million) to fraudulent money transfers. Authorities responded by immobilizing over 3 million accounts tied to 177,000 suspected mule accounts and introduced transfer caps ranging from 50,000 to 200,000 baht per day. Yet unofficial reports suggest the numbers are ballooning, with some estimates claiming as many as 20 million bank accounts could now be frozen.

While BOT Governor Sethaput Suthiwartnarueput maintains that the freezes are “targeted and temporary,” the reality has been catastrophic for jewelry businesses. Small family-owned shops in Bangkok’s Chinatown have been unable to pay artisans or order raw materials. In Chanthaburi, the heart of Thailand’s colored gemstone trade, dealers report consignments of sapphires and rubies delayed because payments cannot be processed. In provincial towns, goldsmiths and silver craftsmen are left helpless, their working capital locked away in inaccessible accounts.

For mid-sized jewelers and manufacturers, the crisis is equally dire. One Nakhon Ratchasima goldsmith noted, “Without transfers, we cannot buy gold sheets or gemstones. Production halts, staff go unpaid, and customers lose patience.” The situation is no better for Indian traders who play a vital role in Thailand’s diamond and gemstone sector. Many have reported being locked out of accounts with hundreds of thousands of baht, unable to pay suppliers or receive international payments.

Kafkaesque Bureaucracy and Endless Delays

Officials claim wrongly frozen accounts can be reinstated with straightforward paperwork. In practice, jewelers and dealers describe endless queues, conflicting instructions, and unresponsive hotlines. Bangkok Bank, with more than 17 million customers, has become the main target of frustration. Small jewelry businesses recount being told to “just wait,” with no timeline given, leaving them paralyzed for weeks.

The ripple effects extend far beyond Thailand. International gem buyers, particularly in the Middle East, Europe, and the United States, are increasingly wary of wiring payments into Thai accounts, fearing funds could be trapped mid-transfer. Cross-border trade has slowed dramatically as Thai suppliers cannot pay overseas partners for raw materials, nor can they receive payments for completed orders. Many exporters are resorting to informal credit lines, a dangerous gamble in an already volatile global economy.

Expatriates and Entrepreneurs Locked Out

Foreigners linked to Thailand’s jewelry trade are also caught in the dragnet. Since May, commercial banks especially Bangkok Bank have closed or frozen accounts of expatriates who do not hold long-term visas, citing anti-money laundering rules. However even the accounts of many foreigners with valid visas or work permits or company papers were also frozen. This paralyzed many small jewelry startups operated by foreign residents. Without access to funds, they cannot pay local staff or handle international sales.

In Hua Hin, a British retiree who funded a local jewelry workshop saw his pension account frozen for over two months. Online jewelry entrepreneurs who sell Thai products on international platforms like Etsy or Amazon are scrambling to use fintech services such as Wise and Revolut, but limits and transaction costs are eroding profitability.

Allegations of Bias and Favoritism

While small traders and jewelers face harsh scrutiny, many suspect that politically connected elites and large corporations remain untouched. Everyday transactions, including PromptPay transfers of just a few hundred baht, are flagged, while luxury purchases by the wealthy escape notice. Critics in parliament have called this “class warfare,” warning that selective enforcement erodes trust in Thailand’s financial system. Many accounts of large corporations like that of Central group or CP group were unaffected although many Thais asked that many mule account holders or scammers would likely have also bought things or products from these corporations.

For jewelers already battling international competition from India, Vietnam, and China, the perception of systemic unfairness adds insult to injury. The credibility of Thai banking, once a strong point for foreign buyers, is now in jeopardy.

Cash and Cryptocurrency Rise as Alternatives

With trust in the banking system at a low point, jewelers are turning to cash and digital assets. In Bangkok’s Yaowarat Road and Chanthaburi markets, more dealers are switching to cash-only sales. Others are experimenting with stablecoins or crypto-to-cash swaps to handle foreign transactions. Thailand’s new crypto-to-baht kiosks, initially intended for tourists, are now seeing increased use among gem traders desperate for liquidity.

However, these alternatives are risky. Cryptocurrency transactions are volatile and can expose small traders to additional scrutiny, while handling large volumes of cash increases risks of theft and liquidity shortages. Still, for many, these workarounds are the only means of survival.

Cross Border Trade at a Standstill

Perhaps the most alarming impact of the freeze is on Thailand’s international jewelry trade. Small and mid-sized exporters cannot pay for overseas supplies of gemstones, metals, or specialized tools. Thai dealers importing gems from Myanmar, Sri Lanka, and Africa are unable to complete transactions. At the same time, payments from foreign buyers in Hong Kong, Dubai, and New York remain blocked.

This double-edged freeze has left Thailand’s once dynamic cross-border gem trade paralyzed. In Myanmar, sapphire suppliers report halting shipments to Thai buyers due to unpaid invoices. Sri Lankan ruby exporters complain of contracts canceled mid-way. Meanwhile, African rough-stone dealers have stopped releasing parcels until payments resume.

The impact is cascading. Without fresh supplies, workshops in Thailand are closing down production lines. Exporters are missing international trade deadlines, jeopardizing long-standing contracts. Foreign buyers, sensing risk, are shifting their orders to India or Vietnam.

Trust in Thai Banking System at Risk

The crisis has triggered a wave of withdrawals as ordinary Thais rush to pull money from commercial and government banks alike. Some customers report that even after resolving freezes, accounts were locked again days later. Many expatriates remain frozen out entirely, fueling widespread panic.

Industry consultants warn that Thailand’s reputation as a global jewelry hub is under direct threat. If the financial system remains unpredictable, international buyers will turn elsewhere, and small jewelers will not recover.

“This is not just about frozen accounts—it’s about the credibility of Thailand as a safe place to do business,” said one Bangkok-based gem analyst. “Reputation takes decades to build, but can be destroyed in months.”

A Warning to Foreign Investors and Retirees

For foreign investors, digital entrepreneurs, and retirees considering Thailand, the message is chilling. The risk of arbitrary freezes has sparked fears that Thailand may no longer be a secure place to hold assets, run a business, or even retire. Property markets could also be hit if foreigners hesitate to invest in condos or long-term leases.

Industry insiders say urgent reforms are required to prevent permanent damage. Without swift action from BOT and the government, Thailand risks losing its standing in the global gems and jewelry trade—a position built over decades of careful cultivation.

A Future in the Balance

The Thai banking freeze has inflicted wounds that may take years to heal. From family-owned jewelry shops in Chinatown to gem traders in Chanthaburi and exporters working across borders, the impact is universal and devastating. Workers are left unpaid, foreign buyers hesitate, and international suppliers cut ties. While large corporations may survive, small and mid-sized jewelers—the backbone of Thailand’s jewelry ecosystem—face existential threats.

As the crisis drags on, the fear is that Thailand’s reputation as the “Gem Capital of the World” will fade. For now, jewelers, gem cutters, and traders cling to hope that reforms will restore trust, but time is running out. The longer the freeze continues, the harder it will be to repair the damage.

Thailand’s jewelry sector is not just an industry—it is a cultural and economic lifeline for millions. Without urgent corrective measures, the freeze could unravel decades of progress, leaving Thailand sidelined in the fiercely competitive global jewelry market.

For the latest on the freezing of bank accounts of jewelers in Thailand, keep on logging to Gems News.

Media references:

https://www.thairath.co.th/news/crime/2882695

https://huahintoday.com/hua-hin-news/expats-in-hua-hin-left-stranded-as-bank-accounts-locked-without-warning

https://thethaiger.com/news/national/bank-of-thailand-tackles-mule-account-freeze-impact

https://www.bangkokpost.com/thailand/general/3104288/more-people-may-suffer-frozen-bank-accounts-central-bank

https://www.reddit.com/r/Bangkok/comments/1n5qjcy/bangkok_bank_account_crackdown_a_researched/

https://www.nationthailand.com/news/general/40055395

https://www.facebook.com/groups/lifeinhuahin/posts/2262789167512017

https://www.thaienquirer.com/57752/bot-freezes-3-million-accounts-sets-daily-transfer-limits-of-50000-200000-baht-to-curb-6-billion-baht-scam-losses

https://www.youtube.com/watch?v=ocjl_T8iJIk

https://portail-asie.com/en/bangkok-bank-account-frozen-in-thailand

https://medium.com/%40cryppushcoin/p2p-exchanges-under-attack-why-binance-is-ditching-thb-and-how-to-protect-your-finances-in-2025-c1095b659663