The blockchain is an undeniably ingenious invention. By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, (Buy Bitcoin) the tech community is now finding other potential uses for the technology.
Since the start of the year, the Thai government has become increasingly outspoken and welcoming of cryptocurrency projects and exchanges. In just a few months, Thai regulators have made notable progress, from setting up cryptocurrency company licenses to permitting exchanges and ICOs.
More importantly, the country has attracted foreign companies by providing clear and explicit guidelines for foreign blockchain companies to operate. It’s a pattern that we are seeing across Southeast Asia, and one that blockchain and cryptocurrency startup founders should take note as they think about global expansion.
Most Asian blockchain companies and exchanges work with local regulators right from the beginning, as they are first building their products and growing their communities. These teams use formal and informal relationships to get buy-in from their respective local governments in order to bolster their credibility. This pattern is particularly true for Southeast Asian countries such as Thailand.
However, it isn’t just startups that are trying to curry ties with government officials – these relationships work in both directions. The Thai government has come up with different types of regulatory engagements are encouraging signs for the region where regulators have been working quickly to provide a legal path for blockchain and cryptocurrency technologies.
In June, Thailand’s government legalized seven cryptocurrencies (Bitcoin, Ethereum, Bitcoin cash, Ethereum classic, Litecoin, Ripple, and Stellar). It has also permitted a limited number of cryptocurrency exchanges and broker-dealers to apply for operating licenses. Then in July, the Thailand Security or Exchange Currency (SEC) permitted additional digital token issuers to file for applications.
In the same month, the securities regulator categorized Initial Coin Offerings (ICOs) into three types: investment tokens, utility tokens, and cryptocurrency. The Securities and Exchange Commission (SEC) recently announced a regulatory framework for initial coin offerings (ICO) and ICO portals that took effect on July 16. However, a lot of cryptocurrency investors are still asking what will be regulated and what will be considered legal by the government of Thailand. It is important to note that after the regulation framework takes effect, Thailand will be one of the first countries to award licences to ICO portals.
As should be clear from this timeline, the speed at which these regulators execute decisions has surpassed that of most countries in the West as well as the rest of Asia.
Thailand’s crypto opportunity, with both Western and Eastern businesses seeking opportunities in the country. In early July, Bithumb, the second largest cryptocurrency exchange in Korea, announced that it plans to open in Thailand after receiving the required regulatory approval from the local government. IBM and Krungsri, one of Thailand’s largest financial institutions with 8.6mn credit cards, sales finance, and personal loan accounts, announced a five-year $140 million engagement to build out digital banking, including blockchain technology.
The crypto momentum will likely continue in Thailand, and more announcements and developments should come in the second half of the year.