Regulation of cryptocurrencies using the example of Thailand

Thailand did not remain aloof from its Asian “brothers” for long, who have long taken note of everything related to crypto-finance.

Until now, Thailand has not taken cryptocurrencies seriously, and their free circulation was supported mainly by the heated interest on the part of foreigners who go there to relax and taste “bread and circuses.”

For a country in which the lion’s share of GDP comes from income from the tourism business, this order of things has led to the fact that almost half of the entire state economy has found itself in the shadows. The Thai government ignored the cryptocurrency turnover, but only now has come to its senses and decided to tighten measures. 

The first bell rang in February of this year, when the authorities, represented by the National Bank of Thailand, decided to ban all financial institutions in the country from any transactions with cryptocurrencies, including input/output, exchange, as well as any forms of investment (including ICO). Commercial banks were the first to obey the introduced taboo, immediately reacting to the restrictions of the national regulator by prohibiting lending for the purchase and sale of cryptocurrencies. Meanwhile, this ban did not affect the private sector and did not have a strong impact on the Thai cryptocurrency market, since the use of banking instruments in this area has always been moderate for ideological reasons. 

But literally a few weeks later in March 2018, the news about the introduction of double taxation came out like a bolt from the blue. Now in Thailand, cryptocurrency purchase and sale transactions will be subject to a 7% value added tax, as well as a 15% tax on capital gains from investment activities. The official reason stated by the Prime Minister of Thailand for enacting the Royal Cryptocurrency Decree - as in other countries - is to combat money laundering and tax evasion.

Such a strict government policy towards the cryptocurrency market may lead to Thai startups moving from Thailand abroad in the very near future. At the same time, it is not difficult to guess which jurisdiction the “exiles” will direct their views to: most likely the choice will be made in favor of Singapore, as the most loyal country in the East, which literally over the last 3 years has become the capital of the Asian cryptocurrency world.