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The Thai Cryptocurrency Regulation Example

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Not so long ago, investors in digital currencies acted in their little corner through nebulous trading platforms with the risk of piracy or even theft. 2017 and a $ 20,000 Bitcoin course went through there and the authorities understood the need to observe the sector more closely . In Thailand, platforms must be accredited and not all of them.

Thailand regulates cryptocurrencies

Unlike others, the Thai government has not bowed its head in 2018 and has been very active in regulating the Cryptocurrency domain. The year had begun badly. In February, the Central Bank issued a circular prohibiting financial institutions from providing cryptos-related services. In March, two draft decrees were published to regulate the sector and clarify the taxation of income related to investments in cryptocurrency . These decrees finalized in May require trading platforms and intermediaries to register with the Thai authorities . In this case, it is the local Securities & Exchange Commission (SEC) that has jurisdiction.

Tax regulations, while mostly ratified, are still debated at the moment.

Approvals granted for several digital currency platforms

According to Bangkok Post , Thailand restricts the operations of the 7 Cryptocurrency-regulated platforms namely Bitcoin (BTC) , Ethereum (ETH) , Bitcoin Cash (BCH) , Ethereum Classic (ETC) , Litecoin (LTC) , Ripple (XRP) and Stellar (XLM) . The absence of the EOS altcoin (EOS)  in this list is probably due to the fact that the Initial Coin Offering (ICO) was still in progress and the mainnet had not been launched when the rules were established.

At the beginning of 2019, we learned that four platforms now enjoyed a license namely Bitcoin Exchange Co., Ltd.. (BX), Bitkub Online Co., Ltd. (BITKUB), Satang Corporation (Satang Pro) and Coins TH Co., Ltd.

Two other applicants have been temporarily denied the license for non-compliance with regulations including investor identification.

An example to follow in Europe?

While a number of Asian countries have made considerable progress in legislative matters in 2018, this is not the case in Europe. Admittedly, the subject has been invited in some political debates but few countries already have regulations in place . The most notable exception is Malta, which is really positioning itself as a hub for fintech companies and has therefore developed a legal framework to reassure investors.

France has also been active in the field. Several articles of the Finance 2019 law are aimed at digital currencies but the rejection of several pro-crypto amendments in mid-December left a bittersweet taste. In Belgium, the government remained shy but directives have been issued at certain levels , notably fiscal ones. With the government currently in routine and elections scheduled for May, little change is expected.

In any case, a European initiative would be desirable in this area. Given the legislative elections scheduled in a few months, the chances of seeing concrete progress in the course of 2019 are however minimal.

Should we choose a regulated crypto exchange platform?

Some will regret the interference of legislators sometimes on principle, other times for the sake of anonymity. Nevertheless, the digital currencies have grown to such an extent that it seems inconsiderate to remain outside any legislative framework. Several industry players are now part of lobby groups to help shape tomorrow’s digital asset policy. If the goal is mass adoption, digital currencies must accept the rules of the game.

For our part, we consider that entrusting its funds to a regulated intermediary remains the most secure option. Of course, the protections are different than for traditional financial assets of the action type. Nevertheless, regulated platforms in Europe like eToro  for example offer a number of significant guarantees.

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