Thailand Adopts Crypto Despite The Authoritarian Regime

Thailand has been under a military dictatorship led by the Royal Thai Armed Forces since 2014 and the regime has since then established strict internet censorship, disbanded the Senate and suspended the Kingdom’s constitution. It is thus surprising to note that amidst such regressive policies, the military junta has acted upon quite a few plans to employ cryptocurrencies and Blockchain systems across the country.

Although slow to pick up at first, the regime has, over time revealed and implemented plans to authorize crypto-exchanges, legalize ICOs and even enforce regulations that legitimize crypto. This happens at a time when the junta has just started to permit political activities again, in anticipation of the next year’s general elections. The actions pave the way for cryptocurrency and Blockchain to have a more prominent role in the coming years in influencing the country’s economic and social growth and liberalization.

The past year has been quite eventful for the cryptocurrency market in Thailand. The Central Bank of Thailand changed its stance from vague indifference to a strongly opinionated one in February, ordering banks across the country to cease all dealings with companies that trade or work with cryptocurrencies, pending the formation of a legal framework.

Within two weeks, Bangkok Bank stopped its transactions with the Thailand Digital Asset Exchange (TDAX) acting on orders from the Central Bank. The bank cited the absence of legal jurisdiction over the matter, leading to an absence of an operating license as the reason for the bank’s termination of the account. A few days later, Krungthai Bank followed in Bangkok Bank’s footsteps and ceased all transactions with TDAX under official order from its chairman. The series of events marked an unclear future for cryptocurrencies in the country, especially after TDAX stopped registering more ICOs in fear of government action against them.

Although harsh at first, officials later assured that the government would look to regulate the use of cryptocurrency inside the country as opposed to banning it outright. As expected, the government later published the first draft establishing legal boundaries inside which cryptocurrencies were to operate. The regulations were cautiously optimistic but signaled at the regime’s intent to integrate crypto into the country’s economy. The regulatory framework came into force in May and allowed token traders and sellers 90 days to get themselves registered to the SEC before facing prosecution and hefty fines.

In November, the Bank of Thailand’s governor, Veerathai Santiprabhob revealed the possibility of the Central Bank issuing its own cryptocurrency to improve interbank transaction speeds. In an interview with Thai media, the governor expressed his expectation for the national economy to switch entirely to digital currencies within five years to a decade.

Thus, it is evident that Thailand has slowly opened up to the possibility of implementing cryptocurrencies on a national scale, albeit at a measured and regulated rate. There should thus be no confusion about the fact that the military-controlled government is still highly skeptical of the whole system and cryptocurrencies in the Thai economy will come under a microscope for the years to come.

Coupled with the fact that the country has begun using the death penalty again and that the new king – Bhumibol Adulyadej – has tried to consolidate his power after inheriting the throne from his late father, the climate may become unfavorable for cryptocurrencies in the near future. However, with elections slated to happen next year and the government’s slow but steady approach to legislation, there is still hope for cryptocurrencies in Thailand.