Thai regulators approve seven digital currencies for ICOs
It took a bit of time, but bitcoin and six other digital currencies are now legal for some transactions in Thailand. The Securities and Exchange Commission announced last week it has approved seven crypto-currencies for use in initial coin offerings (ICOs) and formulated regulations to supervise those transactions as part of reforms to promote but closely monitor the adoption of advances in global financial technologies in the local market.
The details were contained in a royal decree that is considered the organic law for crypto-currencies because it serves as a foundation for other laws and codes to regulate transactions and trading in digital assets. Under the new regulations, the seven that can be used for ICOs can be traded as pairs; in other words, one crypto-currency can be traded for the other. The seven are: bitcoin, ethereum, bitcoin cash, ethereum classic, litecoin, ripple and stellar.
In general, those involved in digital trading or ICOs, and those who advocate their benefits, welcomed the decree that was passed after several rounds of public hearings. ICOs and digital currencies are one means of funding startups, and Thailand is already emerging as a promising location in Asia and the Pacific for startups and technology ventures. Digital currency advocates, however, were critical of the relatively high tax rate of 15 percent on digital transactions.
Investing and trading in crypto-currencies was not advised for the average person, but reserved for more savvy investors, as the market and its mechanisms are relatively young and some risks may be unknown at this point. The need for caution was illustrated last week when a South Korean crypto-currency exchange was hacked and the value of that digital currency suffered steep losses.
The Securities and Exchange Commission (SEC) said it expects that five projects will apply for ICOs when the law takes effect later this month. Following that, the SEC estimates there are about 50 other projects preparing to apply for ICOs in coming months.
An SEC official said the commission would be hiring more experts and staff to conduct the screening processes for firms and others who wish to apply for ICOs. The regulator needs to screen ICO projects more carefully because of their high investment risk, and to avoid any possible scams.
“Projects that can be [easily vetted] and have commercial attributes attached to them will be considered for fund-raising,” said Thawatchai Kiatkwankul, an SEC official.