Thailand regulates use of cryptocurrency as payment

Thailand’s financial authorities are to regulate the use of cryptocurrencies as a means of payment despite fears their use poses a threat to the country’s financial sector.

The Bank of Thailand (BOT), the Securities and Exchange Commission (SEC), and the Ministry of Finance (MOF) issued a joint release, stating “digital asset business operators have expanded their business to cover services related to the use of digital assets as a means of payment for goods and services”.

The potential wider adoption of digital assets as a means of payment as well as their usage as investment in the cryptocurrency market could cause risks to businesses and individuals through “cybertheft, personal data leakage, or money laundering”, which has led regulators to build up strict frameworks for digital assets.

To further reduce risk to the financial sector of the country, Thailand’s central bank announced its intention to trial a central bank digital currency (CBDC) in the second quarter of 2022.

Thailand’s focus on regulation

With Thailand gaining momentum in the cryptocurrency market with retailers and real estate developers accepting digital assets as payments, the issue of regulation has become a priority.

The growth of the crypto market in the country, including plans to launch its own utility token – the TAT coin – as part of a planned ‘cryptourism’ campaign, led Thailand to look at plans of implementing a 15% capital gains tax on profits from cryptocurrency trading.

An anonymous source inside the Finance Ministry disclosed information to The Bangkok Post which said “in 2022, all taxpayers who gained from cryptocurrencies, including investors and mining operators, are subject to a 15% withholding tax, while digital asset exchanges are exempt from such duties”.