Besides Singapore and Malaysia (to some extent), Thailand has managed to position itself as a leading country in Southeast Asia’s push to become a hub for cryptocurrency and blockchain companies. While other countries are still trying to figure out acceptable regulatory approach or outright banning innovation in the space, Thailand has forged ahead.
It prides itself in the push to become the world’s startup capital (blockchain included), and it has taken proactive actions to prove its ambition, and seriousness to compete. So, what exactly is Thailand’s government doing to encourage national blockchain growth?
A smart regulatory framework
Rather than limiting innovation by setting up policies that are hard to abide by (considering how fast innovation moves in the blockchain space), Thailand’s regulators have opted for a friendlier and more flexible approach. Its goal is of course, to help create opportunities for its tech industries, as well as job creation.
As such, companies that wish to deal with either cryptocurrencies or blockchain technology simply have to apply for licenses that usually get approved, as long as several criteria are met. To demonstrate, Thailand was one of the earliest countries in the region to offer licenses to operators of crypto exchanges. While some countries in Asia chose to forbid crypto exchanges and Initial Coin Offerings (ICOs), Thailand’s regulators have enacted laws that dictate that issuers must follow a certain set of rules; such as being well capitalized from the start.
It’s important to point out the fact that Thailand isn’t only attractive for blockchain firms. In fact, Thailand has for many years promoted foreign direct investment (FDI) into its technology industry through the Board of Investment (BOI) Thailand. Foreign companies looking to set up shop in Thailand get a fast-track route to company registration, unlimited work permits for foreigners, as well as preferential tax treatment – in return for access to technology transfer, amongst others.
As the result of “accessibility” to proper guidance and regulations – blockchain companies willingly collaborate with regulators before their products are built, to increase credibility and ensure that all legal requirements are respected. In return, this allows regulators to better understand the market, alongside its importance and potential.
Trialling blockchain projects
Apart from supporting local and foreign blockchain firms, the Thailand government is also working on its own projects. Here are a few noteworthy projects:
- Blockchain-based platform suited to track value-added tax (VAT) payments
The country’s Revenue Department is working on a blockchain-based system meant to prevent value-added tax (VAT) refund fraud. According to the department, the system utilizes blockchain to verify all types of VAT invoices, and determine which ones are fraudulent, by verifying them on the digital ledger.
Additionally, the system can also use artificial intelligence and machine learning to filter its results, and understand common fraud practices.
- Using blockchain to manage copyrights and intellectual property
In collaboration with the British Embassy, the Thailand Ministry of Commerce is said to be working on a blockchain-based platform that will process Intellectual Property (IP) infringement claims, in a more streamlined, cheaper and transparent manner. The platform is said to be able to deal with digital IDs, IP registration, traceability and trade financing.
- Developing a central bank digital currency
So far, the cryptocurrency community has not yet decided whether central bank digital currencies are good or bad for the cryptocurrency and financial markets.
Despite deep rooted mistrust, numerous countries and central banks are working on their very own centralized digital currencies – meant to create cashless societies, improve taxation income, and prevent crime (such as money laundering, terrorist financing etc). Thailand is no different in this regard, but fortunately they have taken a progressive step by recognizing and legalizing 7 major cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Ripple, amongst others.
Cover Photo by: news.livecoinwatch