Crypto Regulation: a Positive Move for Thailand

“If you can’t beat them, join them” goes the saying.

According to popular wisdom, then, Thailand has made a smart move with its recent decision to regulate cryptocurrency transactions.

As of 13th May 2018, a royal degree came into force, which defines cryptocurrencies and their transactions, digital assets and ICOs, as well as comprehensively regulating them. The legislative bodies are still at work to refine regulations and taxation, attempting to reach an even broader spectrum. They appointed the Security Exchange Commission with this task and sellers are required to register with this SEC within 90 days, otherwise they will be fined.

This is really nothing new in the historical struggle between governments and controversial entities.

Let’s take alcohol as an example: if you prevent people from drinking alcoholic beverages, they will not stop doing so, they will simply find other, probably illegal ways to do it. This generates money of course, and it’s all money that the state is losing, as it goes in the pockets of those enterprising enough to invest in it. However, start regulating the market and you will provide the citizens with safer products (thus gaining popularity – always good to have, especially if close to election time) and the government’s coffers with a fresh batch of taxes.

The same can be said about cryptocurrency and digital tokens. National governments – and banks – certainly don’t like cryptos, and why would they? Cryptocurrencies are decentralized, meaning they are not connected to any government, and they don’t rely on third parties such as banks neither to allow users to perform transactions, nor to regulate them. This does not sound like a pasture a state would enjoy grazing on.

The natural response would seem to discourage them, trying to make it as difficult and inconvenient as possible for users to trade with them or even making them illegal. So why bother spending time and efforts in regulating it?

To make a link with the alcohol comparison once more, regulating the cryptocurrency market makes it a safer environment for investors, at the same time preventing crimes and frauds such as money laundering. Not only that: imposing a tax on cryptocurrency, even just a plain VAT, will add a stream of income for the state that they can use for several purposes… Or, why not, even invest more in cryptocurrency!

The positive implications are endless: other than the everyday transactions, imagine what a boost this can be for tourism, import/export or even gambling. In fact, online gambling is an excellent example of where cryptocurrencies are showing their true potential. There is a growing trend of gaming sites like Cloudbet that highlight the bitcoin aspect of their service; whilst there are existing brands, SBObet, for instance that are looking at incorporating the option for their players.

Thailand is not the first country to regulate cryptocurrencies and it’s already in good company. Japan, to mention one, is a good example of healthy and smart regulation system, opposed to the more conservative no-no approach in India, where transacting with cryptocurrency is simply illegal.

Asian and African countries seem to be in the forefront of the bitcoin revolution, as with other fields of technology, whereas the Old World and the United States are not so inclined just yet. I’m not sure, though, for how long bankers can hold onto their stiff chairs…

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