While many regulators around the world have debated about which category that cryptocurrencies and digital assets belong to, Thailand has sidestepped all the controversy and made a truly courageous action by enforcing a completely new law to regulate ICO and cryptocurrencies.
In mid-May, Thai authorities has enacted Digital Asset Business Decree which regulated digital asset business operations and its tax ramifications on certain income earned from digital assets.
And as usual in the crypto world, there are still debates and criticism going on. Some are amazed that Thai regulators are extremely bold to do things that many countries still take time to study and analyze; some only can see the drawback of this regulation.
Archari Suppiroj, Director of the commission’s fintech department shared in TechSauce conference in Bangkok early this year, Thai SEC is trying to keep the balance in awareness between those who think cryptocurrency is just a bubble and those who extremely believe in its future and even think of opening their business in this industry. If the current law is too difficult, companies will move their businesses to different countries which offer more protection for them.
“Regulation brings legitimacy. And legitimacy brings, hopefully, widespread adoption.” Tim Culpan, Bloomberg Opinion columnist.
Under the law, Digital asset business activities consist of digital asset trading center/exchange, digital asset brokerage, digital asset trading; and other activities related to digital assets as specified by the Minister of Finance. The regulators also established a procedure for ICOs registration, which requires detailed business plans as well as their distribution token structure for the pre-approval of SEC.
Notably, all ICOs and crypto-trading must be paired with one of seven chosen cryptocurrencies: Bitcoin, Ethereum, Ripple, Bitcoin Cash, Ethereum Classic, Stellar and Litecoin due to their liquidity and convertibility to Thai baht.
Currently, individual traders still have to pay 15% capital gain tax on the income earned in a transaction. And with the recent publication, in order to reduce the tax burden,digital asset trader have to pay 7% VAT for every trade-off.
Along with Japan, China, Taiwan, it is no doubt that Thailand is speeding up their regulatory framework to compete with other developed countries. Every coin has two sides: despite some limitation and inconvenience of the action, the potential for innovation, investment in Thailand clearly can not be denied.
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