Thailand’s Cryptocurrency Regulations Set for 2024

Cryptocurrency has completely transformed the global financial landscape, prompting governments around the world to adapt and implement regulatory frameworks to monitor its use. One country that has been particularly proactive in this regard is Thailand, which has witnessed significant growth in its crypto market. In this chapter, we will explore the crypto regulations in Thailand in 2024.

Thailand has been an early adopter of crypto regulations and is often seen as a role model in this space. Cryptocurrencies are not considered legal tender in the country, but they are recognized as “digital assets” under the Royal Decree on Digital Asset Business issued in May 2018. This means that digital assets, including crypto assets and NFTs, can be issued, traded, and exchanged by licensed digital asset business operators. The Securities and Exchange Commission of Thailand oversees the regulation of digital assets through the Royal Enactment on Digital Asset Businesses.

The timeline of crypto regulations in Thailand is as follows:

– In 2014, the Bank of Thailand issued a statement clarifying that Bitcoin is not a currency and carries certain risks.
– In 2017, Thailand hosted a meeting of the UNOCS Regional office for Southeast Asia and Pacific, where it expressed its desire to enhance its ability to trace and investigate cryptocurrencies.
– In 2018, Thailand took significant steps towards establishing a comprehensive regulatory framework for digital assets. In May 2018, the Ministry of Finance introduced an Emergency Decree on Digital Asset businesses, making it the first legislation of its kind in the country. In June 2018, the SEC issued regulations for Initial Coin Offerings (ICOs) and granted licenses to the first crypto exchange in Thailand, Satang.
– In 2019, the SEC approved the first four crypto exchanges in Thailand and imposed Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements on them. Additionally, a license was granted to a crypto brokerage firm, further demonstrating the government’s commitment to a well-regulated crypto market.
– In 2020, the SEC proposed new regulations that stipulated crypto exchanges must have a minimum registered capital of $1.6 million and a minimum $1 million digital asset operation fund.
– In 2021, the SEC enforced mandatory identification verification for crypto trading accounts, strengthening its AML efforts. Furthermore, the SEC prohibited the trading of meme tokens, fan tokens, NFTs, and digital tokens used in blockchain transactions issued by digital asset exchanges or related individuals.
– In 2022, Thailand considered imposing a 15% tax on trading digital assets. The government also made it mandatory for operators to inform people about the risks and volatility of crypto before they engage in crypto investments, tightening regulations on crypto advertising. Additionally, rules were issued to ban the use of digital assets for payments of goods and services from April 1, 2022.
– In 2023, the SEC banned crypto lending and staking services as part of its efforts to restrict certain decentralized finance (DeFi) products.
– In 2024, the SEC implemented new crypto-friendly regulations that removed investment limits for retail investors in asset-backed digital tokens and introduced stringent custodial wallet management rules. Retail investors were previously capped at 300,000 baht per offering in asset-backed ICOs. In mid-January 2024, the SEC lifted restrictions on digital token investments, highlighting its crypto-friendly stance.

The latest development in Thailand’s crypto regulations was the release of an updated framework in January 2024. Digital asset businesses operating in Thailand are now required to obtain licenses and comply with the rules set by the SEC. The limit on retail investors for asset-backed tokens has been removed, and dedicated entities for custodial wallet management must be established. Companies seeking to operate in the crypto field must obtain approval from the SEC. However, the SEC has decided not to allow spot Bitcoin exchange-traded funds (ETFs) in Thailand.

In terms of taxation policies, Thailand announced a 15% capital gains tax on profits from crypto trading in January 2022. In March 2022, the government exempted crypto traders from the mandatory 7% value-added tax (VAT) on authorized exchanges and offered a 10-year exemption for investors who invest in crypto startups for at least two years. Income earned from crypto trading or mining is considered capital gains, and traders can offset their annual losses against gains made in the same year. From 2024, Thailand plans to tax overseas income from crypto trading.

In conclusion, Thailand has been proactive in adapting its laws to accommodate the evolving crypto landscape. The recent updates in the country indicate its crypto-friendly stance and suggest that there may be further developments to come for crypto enthusiasts in Thailand.