After Approving Bitcoin and Ethereum, Thailand Wants to Legitimize Crypto
The government of Thailand has approved six major cryptocurrencies Bitcoin, Etherum, Bitcoin Cash, Ethereum Classic, Litecoin, Ripple, and Stellar, officially allowing local exchanges and financial platforms to deal with clients in the crypto market.
U-Turn in Regulation
Up until June, cryptocurrency users in Thailand were concerned with the lack of regulatory clarity and certainty in the digital asset exchange market. Due to rumors that claimed the Thai authorities had planned to crackdown on exchanges and cryptocurrency investors for tax purposes, local users moved to neighboring markets like Hong Kong and Singapore to trade digital assets.
This week, Thailand disclosed that it has approved the above mentioned six major cryptocurrencies as a part of a larger initiative to legalize and legitimize the cryptocurrency sector. The ambitious decision of the Thai financial authorities was made to prevent operations in the local cryptocurrency exchange market from moving to over-the-counter, peer-to-peer, and unregulated markets.
If the Thai government had continued to leave the digital asset sector unregulated with treats against investors, inevitably, investors would have moved to peer-to-peer exchanges that are not subject to regulations and surveillance, creating a more difficult environment for the Thai government to monitor and practice control over.
Instead, the Thai government officially recognized six major cryptocurrencies as an alternative form of money and provided local financial institutions permission to conduct operations around the six assets. But, in the short-term, local financial platforms will only be allowed to deal with the six digital assets until the government decides to open the market to smaller cryptocurrencies and tokens.
“The [Thai] SEC will allow seven cryptocurrencies, used for initial coin offerings (ICOs), to be traded as trading pairs. They are Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, Ripple, and Stellar,”
read the statement of the Thai SEC translated by Bangkok Post.
The Thai SEC further emphasized that exchanges that deal with unrecognized tokens and cryptocurrencies will be considered as unregistered security distributors.
“Sellers of unauthorized digital tokens and those setting up unauthorized seminars to solicit cryptocurrency investment will be fined no more than twice the value of the digital transaction or at least 500,000 baht. They could face a jail term of up to two years.”
While exchanges can add ICO tokens, they must be traded with or against Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, Ripple and Stellar, and not against the Thai baht, Tether, or any other reserve currency and stablecoin.
Regulation Could Make Thai Crypto Market Prosper
The thai cryptocurrency sector has had venture capital-backed cryptocurrency platforms like Coins.th, which also operates in Malaysia and the Philippines as Coins.my and Coins.ph. Coins.th enables anyone in Thailand to pay utility bills, phone credit, credit card bills, and purchase items on e-commerce platforms using Bitcoin, Bitcoin Cash, and Ethereum, while also allowing users to withdraw cryptocurrencies through any major bank and remittance outlet.
The infrastructure of the Thai cryptocurrency market has always been strong, with companies and startups that have not been hacked or breached throughout their existence in the Thai cryptocurrency sector.
Previously, Archari Suppiroj, the director of the Thai SEC fintech department, admitted that strict regulations may lead local investors to migrate to other markets and takeaway the ability of the Thai government to regulate the market.
Efficient and practical regulation on the cryptocurrency market could lead the Thai blockchain sector to prosper and potentially compete with major markets like Hong Kong, China, South Korea, and Japan.