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Thailand speeds up blockchain adoption

According to a recent report, a Thai cryptocurrency exchange pioneer is defying the recent meltdown in virtual currencies with plans to raise US$9.9 million in a security token offering early next year, as the government accelerates adoption of the blockchain technology behind virtual currencies.

The corporation’s plan has the backing of the Thai government, which wants to make Thailand a centre for blockchain.

The company’s CEO noted that we are aiming for the first quarter of 2019 to do the security token offering.

Recently, cryptocurrency companies have started using security tokens which are a new method for fundraising. Here, the firms offer investors a share in profits from certain assets through a dividend. The value of the tokens fluctuates according to the performance of the company.

The tokens are designed to enable the firms to avoid the regulatory problems that were encountered by the industry’s previous fund-raising method – initial coin offerings, or ICOs, which often did not comply with U.S. securities laws. However, Beijing this weekend announced that security token offerings remained illegal in China as they had not yet been authorised.

The Thai cryptocurrency firm intends to use the proceeds of the security token offering to develop an app; an e-wallet that allows consumers to make payments. It also plans to set up shops at tourist hot spots like Phuket and Pattaya.

The company’s announcement comes at a time of turbulence in the cryptocurrency markets. The price of bitcoin, the most common cryptocurrency circulated around the world, to its lowest level since September 2017.

But the company’s plan has the support of the Thai government, which wants to incorporate the technology into its systems and establish a regulatory framework for blockchain and cryptocurrencies.

As reported earlier by OpenGov Asia, the Thai revenue department revealed early November plans to track tax evasion using blockchain technology. Blockchain will help to verify tax amounts, speed up the refund process and add transparency and security.

And it was previously noted that applying new and emerging technologies such as blockchain and big data in the tax collection system are the revenue department’s priorities.

The director of the Thailand Development Research Institute Economic Intelligence Service stated that the government will run the upcoming national digital ID platform on blockchain, referring to the governmental infrastructure that is intended to provide a flexible and highly secure method of self-identification for any Thai citizen.

In June 2018, Thailand legalized seven cryptocurrencies and also allowed a limited number of cryptocurrency exchanges and broker-dealers to apply for operating licenses.

In August 2018, the Bank of Thailand said it would create a digital currency to be used for transferring money among commercial banks and the central bank. It said it would work with eight commercial banks to build a prototype.

On 23 November 2018, the Thai SEC sent a warning to 14 unauthorized cryptocurrency exchange operators, in a sign that its regulatory system is working and flagging up malpractices.

The aforementioned cryptocurrency firm’s CEO was behind another blockchain milestone in the country this year. He applied the technology for the first time in the world in an election – Thailand’s Democrat Party used it to conduct a primary election to select a leader.

The nationwide electronic voting process involving 120,000 voters took nine days instead of the originally planned five due to a technical glitch, but it successfully avoided classic errors such as multiple counts of a single vote and result manipulation.

But it is not thought that blockchain would be employed in the general election that could be held as early as February 2019. However, the firm’s CEO remains ambitious noting that he hopes other political parties or even the government not just in Thailand but in the region can look to using blockchain technology in enabling large-scale e-voting or polling.

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