Thai crypto regulations are on the horizon. Find out what has been discussed so far.
The path that Thailand started in mid-2017, in its search for a better understanding of cryptocurrencies and legalizing its use through a series of regulations, seems to be coming to an end.
According to the Bangkok Post, an unidentified source revealed how the Thai government plans to legalize ICOs and regulate their trade. Some points are quite interesting even for many governments with more significant exposure to crypto trading. Here are the most important ones:
- Earnings shall be taxable.
According to official sources, Thailand could be taxing about 10% of the profits obtained through the sale of tokens via ICO according to the characteristics of the service provided. This measure was officially discussed for cabinet approval on March 13.
Many experts support this decision. Professor Arnat Leemakdej at Thammasat Business School thinks that “Those who trade cryptocurrencies could be taxed and such taxation has already started in the US.”
- ICOs will be classified according to their characteristics.
What are ICOs: assets or securities? According to the press release, sources say that classification will be made according to the characteristics of each token:
“There are three types of ICOs: asset-backed, securities-backed, and utility tokens. Utility tokens let investors purchase a company’s products or services; asset tokens enable investors to acquire rights.”
Also, an official definition of ‘Trader’ is expected the moment of the official pronouncement.
- The SEC will be the only organization governing digital assets, avoiding jurisdictional conflicts that may arise in some countries.
The newspaper says that the Thai government’s official view is that “Virtual coins will be classified as digital assets, not currency, so the royal decree will empower the Securities and Exchange Commission (SEC) to regulate all aspects of virtual coins (…) A royal decree on cryptocurrency supervision will be forwarded for cabinet consideration today, with three main asset categories in the regulatory framework, namely cryptocurrencies, digital tokens, and assets in the electronic format.”
Many applauded this approach and saw it as positive. One of them was The Chairman of the Thai Fintech Association (TFA) and Thailand’s Former Finance Minister, Mr. Korn Chatikavanij, who stated:
“I agree with the Finance Ministry’ s[view] of letting the SEC be the only organization governing digital asset because it already oversees securities and has a profound understanding of digital assets (…) Digital assets are new for everyone, and no one knows everything[about them], so all parties should be open-minded, learn about them and have proper rules and regulations.”
However, the way the authorities proceeded was also criticized by several people, whose positions range from severe aspects to suggestions for improvement:
“So a 10% tax on any Bitcoin profits. And of course a 10% govt refund on any Bitcoin losses, right? Or didn’t they think that far ahead?” says one user who commented on the news; just a sample of how the Thai people might feel about it.
Others, on the other hand, have expressed doubts or at least their constructive criticisms to improve the system. Adisak Sukumvitaya, chief executive at Jay Mart Plc, stated that the government had generated a certain level of uncertainty by not allowing its citizens to know the full picture regarding government regulations or intentions:
“Personally, I think the regulator should announce a clear picture for the cryptocurrency regulatory[framework] at one time rather than gradually[unveil] the framework in bits and pieces.”
Hopefully, by next month’s date, Thailand will announce the complete set of regulations.
An excellent investment opportunity for Thais, but until the date approaches, they just have to deal with the uncertainty. At least they have the knowledge of the direction their government wants to take without having to struggle with contradictory declarations of high-ranking politicians. Something the poor people from South Korea had to deal with a while ago with the whole “ban/no-ban” stances on crypto trading.
