The Rise of Digital Money

Cryptocurrencies first arrived in Thailand about 3 or 4 years ago. To begin with, nobody gave them much attention, but after a year has gone by, people are joining the trend in large numbers especially the most famous of them Bitcoin. Let’s look at some things which have happened after the crypto craze came to Thailand.

Regulators put the brakes on digital money

The Bank of Thailand was the first body to officially announce that the trading and exchange of Bitcoins was not illegal about 3-4 years ago, mainly because there was not yet any supporting legislation. However, speculators’ losses were at their own risk.

Despite these efforts, investment is all about profit and the higher the profit, the more attractive the investment, however risky it might be. Finally, the Ministry of Finance, led by Minister Apisak Tantiworawong, gave in, but not completely. It would regulate and collect taxes instead. The law on crypto taxes will be the first to become effective in the near future, and hard on its heels is the Digital Asset Business law.

As digital money started to boom, many players raised money through ICOs (Initial Coin Offerings), an investment similar to shares, which made the authorities sit up and take notice. The Securities and Exchange Commission made an announcement about the riskiness of ICOs and promised laws to regulate them at the earliest opportunity. Now the decree was effective recently, yet, the new ICO is prohibited until the organic laws are released.

BoT: What is bitcoin??

However, the Bank of Thailand did not yet concede defeat. After Minister Apisak announced no further resistance, the national bank circulated a letter to the country’s commercial banks forbidding them to get involved in any transactions involving crypto-currencies, even by giving advice. This action of the BoT caused great dissatisfaction among Bitcoin speculators after the Thai Bankers Association (TBA) backed the BoT by cancelling all the accounts of crypto exchanges and coin exchanges firms.

Cryptocurrency in the future under the law

What is the future for digital money after cryptocurrencies become legal? A report from siamblockchain.com suggests that firstly, investment in ICOs will become as widespread as that in shares or land.

Startups will have a better survival rate, as until now, many of them haven’t made it because of a lack of capital. From now on they will be able to raise funds through an ICO to expand their business to achieve their dreams. Meanwhile, Bitcoin fraud will be reduced as there will be laws to protect investors.

Finally, a report by Tony Yates in the Financial Times looks at a future when the Bank of Thailand itself will have to establish a reserve fund of cryptocurrencies and set policies to regulate the working of markets in this new money format, just as it does for the rest of the financial system. When this is in place, there will be safeguards to prevent digital money impacting the real economy, which is an opinion currently held by many national banks. Although the Bank of Thailand is currently in opposition, it may not be possible to resist technological trends in the future.

Reference:  Forbes Thailand, Financial Times, Siamblockchain.com, and Bangkok Post