Name
Global FinTech Guide
Country _ Name
Thailand
SectionTitle
DLT and cryptocurrencies
Body
FinTechs belonging to this category offer financial services using crypto currencies. This category also includes FinTechs utilising blockchain and distributed ledger technologies (DLT) upon which Bitcoin and Ethereum are based, among others. FinTechs develop and do research in this field in order to create new services – e.g. crypto currency exchange markets, wallet providers, NFTs-related services, new payment services, "smart contracts" or new clearing and settling services.

Introduction

Attitude of the country towards financial services using crypto currencies

Thailand has had significant growth in the crypto currency sector, allowing many crypto currency-related Start-ups to earn a lot of money in recent years. Digital assets have generally been encouraged and supported by the government, which has allowed most digital asset businesses to be conducted under Thai laws, with a few exclusions, such as those on financial products with underlying digital assets and other related activities. However, there are strong opposing opinions within the financial sectors—including the Bank of Thailand—that crypto currencies have unacceptably high price volatility, risk cyber theft and personal data leakages, are tools for money laundering, and may lead to financial instability.

Legal affairs

Obligations and requirements to provide financial services using crypto currencies described above

Generally, the Emergency Decree on Digital Asset Businesses, B.E. 2561 (2018) (the Digital Asset Decree) is the main regulation in Thailand governing digital asset businesses, including the issuance, and offering of digital assets to Thai investors. The Securities and Exchange Commission (SEC) acts as the regulator for the decree. All digital asset business operators are subject to the decree's regulatory and licensing requirements, with a few exceptions as stipulated by the SEC.

Cryptocurrency exchange market

Under the Digital Asset Decree, a digital asset exchange is defined as a centre or network established for the purpose of trading or exchanging digital assets, operating by matching orders or arranging for a counterparty, or providing a system for or facilitating a person who wishes to trade or exchange digital assets to be able to enter into an agreement, or match the order in the normal course of business.

Under the Digital Asset Decree, a digital asset exchange can be categorised into two (2) types: digital token exchanges and crypto currency exchanges. Each type requires a separate license from the SEC.

To obtain a digital asset exchange license, a business operator must establish a company in Thailand with the minimum required paid-up registered capital, and the company must not operate as a digital asset dealer. The license fee is THB 2.5 million (approx. USD 73,114).

Wallet provider

Custodial wallet provider is a regulated service requiring a license under the Digital Asset Decree. It is defined as a person who provides services or holds himself out to the public as available to provide one or other of the services, i.e. (i) Storing or keeping digital assets, and/or (ii) managing customers' cryptographic keys or any material that must be kept secret, for full or partial authorization of digital assets transfer or transaction approval, in the normal course of business, and in return for a fee or other consideration.

NFTs related service

Digital asset exchanges in Thailand are not permitted to list NFTs, as the SEC has prohibited digital asset exchanges from trading NFTs and some other types of tokens.

Nevertheless, the SEC's guidelines for NFTs confirm that NFTs are not regulated under the Digital Asset Decree unless they have characteristics similar to utility tokens, such as determining the right to receive specific goods, services, or other rights, in which case they would be subject to an initial coin offering (ICO) requirement.

New payment services and new clearing and settling services

In Thailand, payment services and clearing and settling services are regulated under the Payment Systems Act B.E. 2560 (2017), which sets out the framework for a licensing and registration regime for electronic payment business operators.

Although there is no regulation that specifically regulates payment services such as clearing and settling, using blockchain or DLT, the BOT has published guidelines relating to the use of blockchains in financial services. The BOT has recognised stablecoins (crypto currency backed by fiat currency or other assets) and explained that stablecoins backed by Thai baht may be deemed 'e-money' regulated under the Payment Systems Act.

Smart contract

There is no regulatory requirement in Thailand relating to smart contracts, but smart contracts are recognised under the Electronic Transactions Act B.E. 2544 (2001).

Additional comments regarding the legal situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area

Although Thailand has specific regulations relating to digital assets, regulators have attempted to prohibit the use of crypto currencies as a medium of exchange in Thailand.

A recent SEC regulation prohibits digital asset business operators from facilitating the acceptance of digital assets as payment for goods and services, such as making advertisements that promote the acceptance of digital assets as a payment method.

While the SEC does not have legal authority to prohibit Thai citizens from using cryptocurrencies as a means of payment nor to prohibit Thai merchants from accepting them, the SEC prohibits licensed digital asset business operators from facilitating merchants to accept cryptocurrencies as a means of payment.

Economic conditions

Market size for financial services using crypto currencies and biggest companies in this business area

Thailand is rapidly becoming a key player in the cryptocurrency market, with its government actively promoting blockchain technology and fostering a favorable regulatory environment.

Currently, nine (9) companies have obtained a digital asset and/or crypto currency exchange license from the SEC. The lead players include Bitkub Online, Gulf Binance, and Orbix Trade (by Kasikorn Bank).

Additional comments regarding the economic situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area

Thai regulators seem to be taking a measured approach by issuing regulations that slow the rapid growth of crypto currency in Thailand and its potential for misuse for illicit activities—an example would be anti-money laundering regulations.

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