Over the past year, many people in the blockchain industry have said that Thailand will become the crypto center of Southeast Asia, much like what the UK made in Europe.
Major Thai companies have recently been to pay money into Bitcoin mining as the cryptocurrency boom spread across the country, ignoring central bank warnings about risk and volatility. The government has even abolished its proposed withholding tax of 15% on cryptocurrencies, following the pullback in the crypto industry. And we saw a significant collaboration between the country’s Chulalongkorn University and the blockchain network, Tezos, which led to the creation of the first blockchain education and research program.
All the news and events out of Thailand, from big crypto companies to the government, said that Bangkok was on its way to becoming the region’s crypto hub. And then suddenly some very important news broke from its regulators that rattled some investors.
Thai Crypto Ban: Prohibited Payments
Even though Thailand leads the world in the proportion of internet users owning cryptocurrencies (20.1% of Thais between the ages of 16 and 64), the country’s regulator, the Securities and Exchange Commission, has announced that it had banned cryptocurrency payments for goods and services – from April 1.
The ban is aimed at combating financial instability, according to with the Securities and Exchange Commission of Thailand. The risk of cyber theft was cited as another concern.
But is this a real and complete ban on crypto? No not at all.
Thai Crypto Ban: It Was Planned
In fact, I think the ban on crypto payments by the Thai regulator was expected. It is always normal for governments to protect their fiat currency. This allows them to track illicit activities and keep tabs on the economy. I get it, Thai officials believe that the widespread use of crypto will harm the country’s financial system and economy.
The good news is that crypto companies now have a clearer idea of what they can and cannot do in Thailand. This is something very important – when regulations become clear, crypto platforms can avoid risk and focus on innovation.
The ban on crypto payments is unlikely to change the future of Thailand’s growing blockchain and cryptocurrency industry. There are already tons of great crypto platforms out there hiring people and serving their clients with trading services, and that’s just the beginning of what we’ll see to come.
From currency to digital asset
What the Thai government seems to be doing is banning the use of crypto payments. But they are instead embracing them as digital assets; an activity they have not banned.
This means that crypto enthusiasts and Thai investors can still buy bitcoins and other cryptos, HODLs, as well as stake them on a crypto wealth management platform to get a high return on their digital assets.
Thai crypto investors are also always free to seek high returns in the world of decentralized finance, including buying NFTs, trading land in the metaverse, and exploring all the fascinating regions of the fast-growing metaverse. So, although cryptos cannot be used to pay for goods and services, people can still use them to increase their wealth and enjoy all the benefits that come with this new digital era.
Thai regulator still supports the crypto industry
We also want to keep in mind that the Thai regulator has said it will emphasize and support the use of crypto technologies, in line with the country’s broader stance on digital assets. Thailand was one of the first countries to develop a digital currency backed by its central bank.
Thailand even relaxed tax rules for crypto trading until the end of 2023 in order to boost the industry, the regulator recently said – demonstrating that the government clearly wants to embrace and grow its crypto industry.
While Thailand’s ban on crypto transactions undermines the principles of Bitcoin, the country’s digital asset industry will continue to grow very rapidly over the next few years.
About the Author
Raymond Hsu is the CEO and co-founder of Cabal, a leading cryptocurrency wealth management platform. Cabital’s mission is to help people of all backgrounds generate high-yielding passive income from their digital assets and create a more sustainable financial industry. Prior to co-founding Cabital in 2020, Raymond worked for fintech and traditional banking institutions including Citibank, Standard Chartered Bank, eBay and Airwallex.
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