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Can Thailand emerge as a ‘crypto-positive’ travel destination?

Jacob Scott



Thailand, famous for its white-sand beaches, royal palaces and ancient Buddhist temples, is a popular tourist destination. In fact, tourism is one of the country’s most important economic sectors, contributing nearly 20% to the GDP and sustaining 21% of employment in 2019, according to the World Travel and Tourism Council. 

Thailand hosted nearly 40 million foreign travelers who generated over US$56 billion for the country in 2019. Then came the pandemic. After shutting its borders for over a year, the country lost an estimated US$80 billion in revenue. 

To recoup some of this lost revenue, the Tourism Authority of Thailand (TAT) is seeking to entice the crypto wealthy to the country’s shores. TAT is working with regulators and Bitkub, the country’s largest crypto exchange, to enable tourists to pay with cryptocurrencies and position the country as a “crypto-positive society,” TAT Governor Yuthasak Supasorn told Bloomberg in a recent interview.

Supasorn said that accepting digital tokens for travel will make the nation more attractive to crypto holders and help boost tourism revenue despite lower numbers of foreign travelers.  

“There are people who have become wealthy from holding digital currencies and they may want to use the wealth they have accrued,” Supasorn said. “If they can use their currencies here without having to exchange it, or be faced with government taxes, then it would create convenience for them.”

Thailand opened its borders for vaccinated travelers from over 60 countries just last month. However, Supasorn said tourism is expected to lag and attain pre-Covid levels only by 2024.

TAT first announced in February its intention of attracting crypto holders, specifically from Japan, by enabling crypto payments at tourism destinations. But since Thailand does not accept cryptocurrencies as legal tender, allowing crypto payments is easier said than done. However, Supasorn said that TAT is laying the groundwork for it by the time global travel restrictions are fully lifted. 

According to the Bloomberg report, the authority will set up a new unit that will issue its own crypto token — TAT Coin, produce a wallet and build a new tourism ecosystem next year. TAT is already collaborating with the Thailand Securities and Exchange Commission, the Bank of Thailand and Bitkub over the project.  

Bitkub founder and CEO Jirayut Srupsrisopa recently told the Bangkok Post that the private cryptocurrency market will back the TAT Coin with the digital infrastructure it needs, provided the government approves it first. “Our national GDP could grow six times if we can strengthen this market,” Srupsrisopa added. 

While the crypto tourism campaign involving the issue of TAT Coin holds potential, the authority is being cautious and examining all regulatory obligations, preventive measures against cybercrimes and ensuring customer protection, Supasorn said

Thailand has been tightening its grip on the crypto market

Supasorn aims to paint Thailand as a crypto-friendly destination for foreign travelers. However, as one of the first Southeast Asian nations to introduce crypto regulations, Thailand’s policies toward crypto are rather ambiguous. 

Thailand first regulated crypto with its Emergency Decree on Digital Asset Businesses law that came into effect in May 2018. The law classified virtual currencies as a new asset class and put the SEC in charge of regulating the market while a separate decree levied a 15% capital gains tax on digital asset transactions. 

The law also prescribed penalties including jail time to prevent fraud, money laundering, tax avoidance and other crimes. The country’s crypto legislation was introduced after the Bank of Thailand — the country’s central bank — banned financial institutions from dealing with cryptocurrencies in February 2018. 

Since the introduction of the digital assets regulation, the government has updated regulatory oversight and obligations to address various aspects of the evolving crypto sector. Many of these updates tightened the government’s control over the crypto market while on multiple occasions denouncing crypto. 

For instance, in February 2021, finance minister Arkhom Termpittayapaisith criticized excessive speculation in the crypto market and said that cryptocurrencies pose a risk to Thailand’s capital market. In March, the SEC published draft legislation that proposed ​​cryptocurrency trading be restricted to those having a minimum of 1 million baht (approximately US$33,000) annual income or those having a minimum net worth of 10 million baht, excluding the value of their homes. 

The proposed legislation also said investors should have a minimum experience of two years trading stocks and futures before they are allowed to trade crypto. The draft legislation, which was introduced with the aim of protecting investors, sparked a massive public outcry as it could potentially prohibit low- and middle-income families from crypto trading. The SEC backtracked on the draft, saying it was released to gauge investor sentiment. 

After an SEC hearing, the markets regulator replaced the annual income with crypto education requirements in April. The SEC updated the proposed legislation, which now said that those interested in investing in crypto must have previous experience in crypto trading and those new to the market have to attend a training course or pass a test to prove knowledge before they can start trading. 

In March, the Bank of Thailand also outlined its regulatory approach towards stablecoins and declared Terra’s THT stablecoin as illegal

In May, Thailand’s Anti-Money Laundering Office introduced stringent know-your-customer requirements for opening crypto trading accounts. The new guidelines required customers to be physically present for verification and went into effect in September. The law essentially halted new account opening by exchanges that had to change their operational procedures to comply with the new requirements. 

In June, the SEC announced that decentralized finance projects that issue tokens would require a license to operate in the near future. Later that same month, the SEC clamped down on memecoins and non-fungible tokens (NFTs). The regulator introduced a new rule that banned memecoins like Dogecoin, Shiba Inu and SafeMoon as well as non-fungible tokens (NFTs), fan tokens and exchange tokens. It also prohibited exchanges from providing services related to such tokens. The markets regulator gave exchanges 30 days from the date of announcement to de-list such tokens and comply with the rule. 

Though stringent, the law was introduced to protect investors from rug pulls after several memecoins crashed, Varit Bulakul, head of digital assets at the Booker Group, told Forkast.News. It’s the same reason for banning NFTs whose prices can be highly volatile, Bulakul added. 

In July, the country’s central bank issued a warning against using cryptocurrencies like Bitcoin and Ether for payments. Later that same month though, the Bank of Thailand published new guidelines to promote and regulate the use of blockchain in the financial sector and despite the previous developments, Siam Commercial Bank, the country’s oldest and biggest bank, bet US$110 million on DeFi

In August, the SEC proposed additional rules for digital asset custodians to prohibit crypto businesses from using investor assets to benefit themselves or their clients. This meant that lending services and yield products where customer assets are lent to borrowers would be prohibited. 

In September, the SEC temporarily suspended the license of crypto exchange Huobi and recommended the finance ministry to revoke it permanently due to an “irreparable” breach of regulations. Huobi was ordered to return all assets to Thailand-based customers by Dec. 2. 

Just last week the SEC began accepting comments for regulation of cryptocurrencies that are designed to hide the identity of participants, generally referred to as privacy coins. Examples of privacy coins include Monero, Zcash, among others. 

And on Wednesday, the Bank of Thailand issued renewed warnings to companies against accepting crypto payments. The central bank said the high volatility of crypto prices and risks of cybercrime can impact customers and businesses. It added that the bank is working with the SEC to formulate regulations to use digital assets for payments to limit risks.

It’s not all bad news

Despite all the clampdown and regulatory challenges, crypto and blockchain developments in Thailand have not halted. In August, a blockchain-based cross-border remittance corridor between 27 countries in the European Union region and Thailand was set up. 

In September, Fraction, a subsidiary of Hong Kong-based fintech firm Fraction Group, received a license from the SEC for an asset-backed token service offering based on the Ethereum blockchain. The license allows it to list and trade tokens for fractional ownership of physical or digital assets. 

Last month, Thailand’s biggest department store chain announced that it has developed its own blockchain-based digital currency called C-Coin and is testing it among employees before public issuance. 

Interestingly, Bitkub launched its own NFT platform late last month in spite of the ban imposed on NFTs by the SEC. And Jay Mart, which operates the token JFin, is launching an NFT marketplace on Dec. 16. 

Although Bitkub’s NFT marketplace has been operational for a few days, there has been no reaction from the SEC. But even though the law about NFT marketplaces is unclear at the moment, it will be cleared up once JNFT launches since Jay Mart is closely engaged with the SEC on regulatory compliance, Bulakul said. 

And on Tuesday, Bitkub and The Mall, which operates top-tier shopping centers in the country, announced a joint venture that would enable customers to pay with crypto at participating shopping malls. This is despite the warning against crypto payments issued earlier. 

Is Thailand really crypto-positive? 

Thailand has seen a huge spike in crypto trading since last year. The number of cryptocurrency trading accounts in the country has been growing by 27.6% month-on-month this year. While there are only 1.3 million crypto trading accounts in Thailand — less than half the number of stock trading accounts — it is the pace of their growth that has been remarkable. 

Even in the field of decentralized finance (DeFi), Thailand is leading. According to Chainalysis’ Global DeFi Adoption Index, Thailand ranked third after the U.S. and Vietnam in DeFi adoption. Investments in the crypto space have also been increasing with Booker Group intending to invest US$48 million on DeFi projects and apps, and Siam Commercial Bank buying a majority stake in Bitkub for approximately US$535.6 million

So despite all the regulatory hurdles, Thailand’s crypto sector has been thriving. According to Bulakul, Thailand has taken a positive stand on crypto and the regulations are simply being introduced to protect investors and not to thwart innovation. 

“We are quite crypto-positive because the SEC is now giving out their own content [on crypto] and they are not negative,” Bulakul said. “Regulation has to be updated regularly and the whole point is just to prevent bad actors from taking advantage of the crypto market.”

The SEC is trying to protect the interest of retail investors, the majority of whom lack experience in crypto trading, Bulakul said. “Their [the SEC’s] job is to protect the small retail investors who have little experience … The SEC understands there’s a lot of opportunities to capture, and I don’t think they want to block these opportunities as long as it doesn’t cause any damage to retail investors,” he added. 

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Kazakhstan Orders Bitcoin Miners to File Status Reports

Jacob Scott



Nur-Sultan, Kazakhstan (Image: Envato Elements)

Kazakhstan is mandating that cryptocurrency miners file regular status reports in a new ministerial order, as the Central Asian nation attempts to gain a stronger grip on the sector.

See related article: Ex-Kazakh president’s brother busted for illegal crypto mining

Crypto miners must submit information including locations of mining facilities, IP addresses, power consumption volume, number of mining rigs, staff size and planned investments, according to the order dated April 29.New miners will have to report 30 days before starting operations, and existing miners are to provide authorities with quarterly status updates.Crypto miners shutting down also need to report to authorities.Kazakhstan became the world’s second-largest Bitcoin producer in 2021 after miners moved there en masse following China’s mining crackdowns, but an unstable power supply has made for an increasingly unstable mining environment in the Central Asian nation.Former Kazakhstan president Nursultan Nazarbayev’s brother Bolat Nazarbayev was among 106 illegal cryptocurrency miners to halt operations as the government raided illegal mining activities, the Financial Monitoring Agency said in March.

See related article:Crypto mining’s Great Migration continues — out of Kazakhstan

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Pakistan Takes a Fresh Look at Cryptocurrency

Jacob Scott



Image: Envato Elements

Pakistan’s federal government has formed three subcommittees to explore the future of cryptocurrencies and related services, local media report

See related article: Pakistani central bank echoes RBI’s concerns over crypto

The first panel is chaired by the law secretary with the State Bank of Pakistan (SBP), with the Federal Investigation Agency (FIA) and Pakistan Telecommunication Authority (PTA) as members, among others.Two other subcommittees have been set up under the chairmanship of SBP Deputy Governor Saima Kamal. Panel members include representatives from the Ministry of Information Technology, the Securities and Exchange Commission of Pakistan, PTA and others. The subcommittees will prepare their proposals and send them to a committee headed by the finance secretary, after which the country will prepare recommendations on the future of cryptocurrencies.The SBP recommended a ban on cryptocurrencies earlier this year, with one of the nation’s largest banks quickly heeding the advice by asking customers to avoid using its bank for crypto transactions.  

See related article: From Myanmar to South Korea: Breaking Down Blockchain’s Future in Asia with Paul Ulrich, GSMA

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Blockchain Can Transform International Trade, but Big Hurdles Remain

Jacob Scott



The Covid-19 pandemic represents the single largest challenge to global trade for decades.  With restrictions of varying severity coming in and out of force around the world on a rolling basis for the past two years, normality for international trade is by now hard to remember. In 2020, world trade volumes plunged in a way never witnessed previously, and although trade rebounded sharply in 2021, there can be no doubt that the flows of goods and services around the world that global growth relies upon are today more fragile than perhaps at any point in recent history.

However, as research by the OECD has made clear, the impact of the pandemic has varied greatly in terms of its impact on different sectors, regions and individual countries.  Their analysis suggests that the pandemic generated trade changes in a single year roughly equivalent to the level of change that would previously have occurred over as many as five consecutive years.

The pace and severity of the disruption can, however, be seen to have had specific upsides for two highly important aspects of global trade. Firstly, the pandemic created new or intensified previous incentives toward risk mitigation strategies on the part of consumers, firms and governments, and secondly, the drive to develop, test, and implement new technologies for the management of cross-border trade has been dramatically accelerated.

Both were direct consequences of the pandemic-induced disruption, and both suggest an increased role for blockchain technology in this sector is likely in the near future — though risks and obstacles remain.

What are the main problems facing global trade today?

Macroeconomic research conducted by the Bank of England has shown that shipping costs have risen dramatically since the onset of the pandemic.

Source: Bank of England

This context has made it all the more essential for firms and governments to be looking for cost-efficiencies anywhere and everywhere, and this is where blockchain technology can make a positive impact.

Aside from Covid-related problems, the pre-existing difficulties with conducting successful cross-border trade are well-known. Primary among these are three areas to which blockchain has a huge amount to contribute: managing documents, speeding up trade finance and simplifying tariff collection.

Storing and displaying the correct documentation

Trading across borders is infinitely more complex than domestic trade, partly because the exchange now has to comply with two or more sets of regulations, rather than just one.  Demonstrating that trade is legal and compliant therefore involves a great deal of paperwork to be completed requiring input from both the importer and the exporter.

While specific requirements vary from one country to the next, an international shipment is likely to need at least some of the following documents to be prepared and ready to be displayed.

Common necessary trade documents include an airway bill, the certificate of origin, a bill of lading, a combined transport document, a bill of exchange, the insurance certificate, the packing specification, plus additional inspection certificates from customs posts that the cargo has passed through.

This generates a great deal of work for international traders, and the fact that much of this administrative work is carried out on paper creates obvious problems of trust and authenticity, not to mention efficiency.

Facilitating trade finance

Only a tiny fraction of global trade is settled in cash and prior to the goods being shipped. This is because buyers usually pay once goods have been received and inspected, and therefore some sort of financing is essential to bridge the time gap between when an exporter ships a consignment and when they receive payment.

The traditional method involves “letters of credit,” whereby a letter is issued by the buyer’s bank guaranteeing that the agreed payment to the seller will be received on time and for the correct amount. If the buyer is unable to make the pre-agreed payment on time for whatever reason, their bank is required to cover the full or remaining amount of the purchase.

This process, whereby one or both of the trading partners’ banks bear some of the risks for financing the transaction, means financial institutions are unwilling to commit to such arrangements without undertaking extensive due diligence.

This is an extremely labor- and paper-intensive process that takes considerable time and effort to complete. Research carried out by the Boston Consulting Group and SWIFT found that the process commonly involves more than 20 separate entities for a single trade finance deal, with necessary data typically contained in 10 to 20 different documents, creating approximately 5,000 data field interactions. Blockchain technology is uniquely capable of speeding up and simplifying these tasks.

Collecting tariffs and government trade data

The current inefficiencies in global trade also consume government resources. Tariff collection is a process that currently involves extensive paperwork as well as employee time from the government as well as the private sector. Tariff collection requires a great deal of infrastructure to be installed at docks, ports, airports, trains station and road entry points, and transporters often have to wait for extended periods of time while customs declarations are checked and other regulatory procedures are completed. This all adds time to delivery schedules, and therefore also indirectly raises costs for consumers.

How can blockchain applications help?

As World Trade Organisation economist Emmanuelle Ganne has argued, blockchain is “game-changer” technology with vast potential to solve some of the major problems facing global trade.

Toward paperless trade

The ability of blockchain to enhance the efficiency of business processes means we can move in the direction of fully paperless trade. By allowing the safe, secure and reliable digitization of trade documents, certain administrative procedures can be automated, with enormous impact on transaction speed.  

A host of banks and IT companies are currently working on such systems, including a Red Date Technology-built project for China’s Blockchain Service Network. These new blockchain-based systems aim to facilitate paperless trade by connecting trade partners together on a private network of blockchains, including both permissioned and permissionless chains. Once connected to this network, importing and exporting firms can then share data between jurisdictions in real time via the blockchain-powered data centers.

Trade finance on the blockchain

As explained above, the current system of trade finance is costly and slow. The digitization of trade finance processes can thus bring significant savings to international trade transactions.

The most promising developments here relate to digitizing and automating payments as well as digitizing information contained in scanned PDF documents. It is precisely the immutable and transparent nature of the blockchain that can enable full confidence in such digital processes to flourish.

One of the earliest and most impressive examples of a decentralized application of this type emerged from a collaboration between Barclays and fintech start-up Wave, which successfully conducted the first known blockchain-based trade finance transaction back in 2016.

This transaction took place on a permissioned chain and provided trade finance to facilitate the export of approximately US$100,000 worth of dairy products from Ireland to Seychelles. Crucially, the process of obtaining a letter of credit, which normally takes around 10 days, can be cut to less than four hours, according to Barclays.

Smart contracts at the customs post

A blockchain system would allow smart contracts to be encoded with the relevant legal and regulatory requirements to allow the automatic payment of customs duties.

The technical architecture to allow this would rely on a digital mechanism for monitoring external events, sometimes described as a “blockchain oracle.” The third-party services provided by the oracle can then be used to trigger smart contract execution if all the pre-defined conditions are met.

A simple example of this concept in action would be that an oracle could be designated to monitor a delivery truck equipped with sensors. A smart contract could be linked to this oracle and would then be able to automatically execute payment when the delivery crossed the border.

Decentralized applications similar to the proposal above could also be used to allow intermediaries to collect tariffs and any other taxes due on a shipment on behalf of governments. Not only would this save time at borders, but it would significantly reduce the risk of piracy or other forms of customs fraud.

Finally, the use of blockchain applications to collect tariffs would also help improve the accuracy of trade data and statistics, some of which are still based on approximations due to the challenges of collecting and systematizing all the relevant data.

Is blockchain technology the future of global trade?

The short answer to this question is that we still don’t know for sure, although several blockchain-based applications seem to open up very exciting opportunities in the field of cross-border trade.

There are risks ahead, however, particularly around scalability and whether or not such applications can be deployed as widely across dozens of organizations as they’d need to be to have the desired impact.

Cost and interoperability are also potential issues standing in the way of mass adoption. Blockchain technology is relatively new and it remains costly to build blockchain-based applications. Developers with blockchain experience are also in short supply, which again can add to the cost of application development.

For those reasons, we are still a long way away from blockchain and distributed ledger technology being as widely understood and used by companies and governments, despite their demonstrated potential to transform the global trading system for the better. Fortunately, the industry is building infrastructures and tools that address these issues. We have also seen significant momentum over the past year with mainstream global enterprises investing in or embarking upon blockchain technology initiatives. The combination of infrastructures, tools and mainstream adoption is cause for optimism that over the next several years, we will see the positive impact of blockchain technology in the international trade space.

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