Cryptocurrency will be regulated as a means of payment in Thailand

Cryptocurrency will be regulated as a means of payment in Thailand

 

Thailand has announced that cryptocurrency will be regulated as a means of payment for goods and services "to avert potential impacts on the country’s financial stability and economic system." The announcement was issued by the Bank of Thailand, the Thai Securities and Exchange Commission, and the Ministry of Finance.

In Thailand, cryptocurrency will be accepted as a form of payment. The Bank of Thailand (BOT), the Thai Securities and Exchange Commission (SEC), and the Ministry of Finance (MOF) have unveiled a plan to regulate bitcoin as a payment method.

The three regulators explained that after reviewing the benefits and risks of crypto assets, they "deem it necessary to regulate the usage of digital assets as a means of payment for goods and services, to avert potential impacts on the country’s financial stability and economic system."

Citing that crypto business operators have been offering services related to the use of cryptocurrencies as a means of payment, including setting up crypto settlement systems, the regulators conceded:

‘This may result in a wider adoption of digital assets as a means of payment, aside from their usage as investment, which could potentially impact financial stability and the overall economic system.’

The authorities then outlined various crypto-related risks to consumers and businesses, such as "price volatility, cyber theft, personal data leakage, or money laundering, besides other risks."

The announcement further details: "Regulators will consider exercising power in accordance with the relevant legal frameworks to limit the widespread adoption of digital assets as a means of payment for goods and services."

The SEC, which oversees crypto enterprises, has stated that it has a strategy to foster the development of digital asset businesses while also protecting consumers.

As Thailand prepares to slap a tax on cryptocurrency revenues, both political parties have expressed reservations about the government's proposal. Several political personalities have stated that steps needs to be initiated to avoid double taxation of cryptocurrency income.

Representatives of Thai political parties across the political spectrum have expressed their opposition to the government's plan to tax cryptocurrency earnings.

Korn Chatikavanij, a former investment banker, finance minister, and current head of the Kla Party, recently stated that the new tax would apply to all profitable activities. However, these gains will have to be merged with other revenue for annual tax returns, according to Korn, who also remarked on social media:

‘I disagree with the Revenue Department on collecting this tax until there is further clarification on issues of concern.’

Then comes the value-added tax (VAT), he noted, elaborating: "The Revenue Department is collecting VAT like crypto is a product." Therefore, there will be a double VAT payment on cryptocurrency transactions where you have to pay the VAT when selling the product and another VAT when selling crypto in baht. "

If the draft legislation is passed, crypto vendors will be required to pay VAT without being able to give a receipt because the currencies are frequently exchanged on platforms with anonymous purchasers. Many countries, including Singapore, Australia, and EU member states, are revising their legislation to exempt crypto transactions from VAT, he said.

However, the Bank of Thailand Governor, Sethaput Suthiwartnarueput explained:

"At present, widespread adoption of digital assets as a means of payment for goods and services poses a risk to the country’s economic and financial system. Therefore, clear supervision of such activities is needed.

However, technologies and digital assets that do not pose such risks should be supported with appropriate regulatory frameworks to drive innovation and further benefit the public, "he concluded.

Two additional political parties, the Pheu Thai Party and Thai Sang Thai, have expressed their opposition to the tax idea. Jakkapong Sangmanee, the registrar of the Pheu Thai Party, stated that crypto dealers are already required to pay personal income tax. He claims that adding a new tax on top will affect regular investors while benefiting institutions.

"There is nothing wrong with a policy to collect tax on income from digital assets as long as it is fair and does not exploit taxpayers," said Sudarat Keyuraphan, the leader of the Thai Sang Thai party