A recent report noted that Thailand has the potential to be a regional hub for digital currencies, with annual trading volume expected to grow by at least 500% over the next 1-3 years, driven by initiatives to regulate digital assets, according to the forecast of a consultant at a major tech firm in Thailand.
If that forecast holds true, Thailand will rank among the top Asian countries for digital currency trading in three years, said chief executive of the company.
The CE also noted that Thailand has an environment that supports digital assets and initial coin offerings (ICOs), as it is among the few countries in the world that have acted on dealing with digital assets.
With the digital asset royal decree coming into force since mid-year, foreign investors have paid greater attention to Thailand’s digital asset market despite the 7% value-added tax and a 15% withholding tax on capital gains from digital asset investments that seem quite high, she noted.
The company’s CE made note that Thailand is the first country in the world that has laws for all ICOs and other digital assets – exchanges, ICO portals, brokers and dealers.
The royal decree on digital asset businesses went into effect on 14 May 2018. The new legislation was enacted to regulate digital asset offerings and businesses undertaking digital-asset-related activities.
Pursuant to the royal decree, digital assets cover cryptocurrencies, digital tokens and any other electronic data units, as specified by the Securities and Exchange Commission.
At least three ICO portals are expected to be certified by financial regulators by year-end, with additional ICO portals set to be approved in next year’s first quarter, it was noted.
The consulting firm is among the ICO portals that applied to become a certified ICO portal, the company’s CE noted said, adding that the company has about 10 ICO deals in the pipeline, two of which are getting ready to launch their offerings once Icora becomes an authorised ICO portal.
The CE stated that three points of weakness in ICO regulations in Thailand need further regulatory revision: the cost of issuing an ICO, whereby the fixed cost is 3 million baht excluding financial advisory fees; the long period to approve an ICO issuance; and the investment limit capped at 300,000 baht per ICO issuance for retail investors.
A report on noted that Thailand’s ‘ICO portal’ could see it enter new crypto world.
Thailand, despite being in the run by a military government, is increasingly open to crypto-based initiatives.
The report noted that, the SEC Secretary-General had said that at least one ICO portal will be certified in November, then the government can approve each ICO offering, which might start in December.
An additional five crypto-currency business operators have also been submitted to the SEC for approval. The Commission is still assessing approval requests, during which time the operators are still allowed to conduct their businesses for 90 days.
The companies seeking approval and licenses to operate as digital asset exchanges are still permitted to operate while the regulator deliberates on approvals.
The ICO portals will enable the screening of initial coin offerings, conducting of due diligence, verifying KYC (know your customer) processes and checking smart contract source code. They cannot, however, place any guarantees on the success of individual projects or advise on investment risks.
The tax status is still a grey area with the onus being placed on the individuals to declare their own profits from crypto-currency trading. Currently, no taxes are collected by exchanges operating within the Kingdom.