Japan might rightfully be considered the “King of Crypto” on Asian shores, but there are several contenders to the crown emerging. South Korea’s U-turn on its crypto ban has been well-documented, but that’s not the only country making great strides. What started as a small uptake, has now seen Thailand move towards widespread crypto acceptance. The country’s largest cinema chain now accepts cryptocurrency payments, but that’s simply the tip of the iceberg. The Bank of Thailand (BoT) has announced that it’s allowing local banks to launch subsidiaries that will be able to deal in cryptos.
Thailand’s Crypto Overhaul Continues
It’s newsworthy whenever a bank makes strides towards crypto acknowledgment – just look at what’s happened in Switzerland – so the BoT’s decision is major. The announcement came on August 1st, with Thailand-based banks now able to legally provide crypto brokerage services, operate and back crypto-focused businesses, issue coins, and – most importantly – invest in cryptocurrencies through subsidiaries. There is no doubt about it, this move is going to be a game changer in Thailand for cryptocurrency enthusiasts.
Understanding the New Regulations
This move obviously represents a step forward for Thailand, but it still doesn’t allow banks to provide crypto related services directly to the public. Effectively, the new regulations are creating a business-to-business network, as only businesses that are approved by Thailand’s Securities and Exchange Commission (Thai SEC) and the Office of Insurance Commission (OIC) can work within the new system. These new subsidiaries are also barred from offering crypto-related services to individuals.
Under the new regulations – which are somewhat complex – these new subsidiaries can provide investment resources to customers, unless they wish to invest in digital assets that have “financial innovation” in mind. The term “financial innovation” is certainly open-ended, with clarification of this likely to come given time. What is currently known is that should an individual wish to invest in such a fashion, they’ll be required to use the Bank of Thailand’s Regulatory Sandbox.
A Year of Change
It wasn’t too long ago when the BoT declared that banking institutions in the country were prohibited from trading and investing in crypto, this was alongside being prohibited to engage with crypto exchanges. Crypto exchanges are actually now legal in Thailand, as long as all registration and operation regulations are adhered to. Thailand banks at the time were also advised to not encourage crypto trading amongst consumers. However, in May a shift in how cryptocurrencies were viewed in Thailand occurred.
It was in May when the Thai government defined cryptocurrencies as “digital assets and digital tokens,” through a new regulatory framework. This meant that moving forward cryptos were to be regulated by the Thai SEC. Following that, the BoT also announced that it was looking to use using a central bank-issued digital currency to find a new way of conducting interbank settlements. The bank is of the belief that cryptocurrency holds the key to reducing transaction times and cutting transaction costs. When you consider that the Thai government has also implemented regulations regarding ICOs – becoming one of the first nations in the world that lets ICOs operate in a fully-regulated environment – it’s clear that country is making a major statement.
When it comes to cryptocurrency adoption and acceptance, Thailand isn’t rivaling Japan just yet, but it’s getting close. These latest developments only show that the Land of Smiles doesn’t fear the digital currency revolution, as it actively looks to make it part of the country’s fabric.