GCR Trend Update 2020: Crypto Trends in Thailand
Given the ongoing Coronavirus taking place in China and in the surrounding region, having a large impact on the crypto activities such as conferences and communities, we continue to believe Southeast Asia (SEA) may be potentially spared as one of the breakout regions in the eastern hemisphere in 2020. As we emphasized earlier this year, we advise our readers to pay attention more to SEA this year. SEA will see a concentrated and robust number of crypto activities in many of its regional countries, whether that’s focused on crypto, blockchain or digital currencies.
For our next few premium posts, we’ll be diving into the recent trends and ongoing opportunities in blockchain and digital currencies in SEA. Checkout all the existing ones here.
Crypto Trends in Thailand
Thailand is perceived as one of the blockchain trailblazers in Southeast Asia as state agencies such as the Bank of Thailand and a number of public administrations and services have deployed or have plans to deploy blockchain as part of their operations. Additionally, Thailand has by far the most well-defined legislations in place to govern security token offerings and exchanges.
During March this year, the Thai SEC approved the country’s first ICO portal and amended the Securities and Exchange Act to allow STOs to be undertaken in the country before announcing that STO guidelines are on the way.
Crypto and Blockchain Trends by Category in the Country:
- Central Bank Digital Currency– Blockchain consortium R3 and global IT leader Wipro Limited have developed a blockchain solution prototype to enable digital currency for interbank settlements in Thailand.
- STO– Elevated Returns and Seamico (Thai financial services) have been permitted to tokenize real estate market in Thailand worth US$100 million. Additionally, in February 2019, Thailand’s National Legislative Assembly voted to approve an amendment to the Securities and Exchange Act that effectively legalizes the issuance and trading of securities such as stocks and bonds using blockchain technology. This first step sets the tone for STOs in Thailand. However, there is more to be done- Thailand hasn’t established clear guidelines regarding custody requirements for digital asset and cryptocurrency businesses.
- Letter of Credit on blockchain- Standard Chartered makes Letter of Credit transaction on blockchain, with pilot consisted of digitizing and simplifying the end-to-end exchange of information between all parties in a shipment of an oil product from Thailand to Singapore.
- Crypto digital banking- IBM created a $140 million cooperation program with Krungsri, a major financial institution in Thailand, which focused on digital banking and blockchain technology. Separately, United Kingdom-based digital banking app Revolut announced a major partnership in 2019 with Visa to expand its services globally across 24 new markets, including Thailand.
- Money transfer and remittance on blockchain- Money transfer service Xendpay has joined Ripple’s global network RippleNet to support international transactions in Thailand. Separately, in early April 2019, the central banks of Myanmar and Thailand endorsed Everex’s Ether -based remittance system.
- Public service
- Voting on blockchain– In January this year, the Ministry of Science and Technology’s National Electronics and Computer Technology Center successfully completed the development of its blockchain-based voting system and is looking for trial partners to test out the system on a small scale, such as elections in universities, provinces, and communities, etc
- Government adoption on blockchain- The Royal Thai Government is leading by example in terms of blockchain adoption and use, deploying the technology in various industries such as banking and finance, logistics, identity verification, and taxation.
- Cryptocurrency payments- Some notable top-down adoption examples in Thailand include that of local payment services provider Omise through its blockchain affiliate OmiseGO as well as the collaboration between local blockchain-based remittance settlement startup Velo with retail giant Charoen Pokphand Group and international convenience store chain 7-Eleven. Additionally, privacy-focused cryptocurrency Zcoin became available for spending in Thailand at any merchant registered with the Thai QR code system through Satang App. The system instantly settles transactions and allows merchants to be paid in Thai Baht via regulated exchange Satang Pro.
- Logistics on blockchain- Thai Customs Department intends to use IBM’s Tradelens blockchain solution to track shipping in Thai ports.
- Authentication with blockchain– Big Four audit firm Ernst & Young is providing its proprietary blockchain solution for a major new platform that helps consumers across Asia determine the quality, provenance and authenticity of imported European wines.
- Innovation through blockchain- Telecoms giant NTT Corporation’s Thai subsidiary plans to launch a major innovation lab focused on blockchain, artificial intelligence and internet of things technology.
- Crypto Trading and Exchanges
- ICO Portal-Thailand, who had previously been skeptical is now looking to regulate and has approved four exchanges (Bitkub, Bx, Satang Pro, and Coins) in the nation.
- International exchanges– Huobi’s Thailand-based subsidiary has sealed the country’s fifth official license to operate a fully-regulated digital asset exchange.
- Oil and gas
- Renewables Platform on blockchain -Thailand-based multinational energy conglomerate PTT and blockchain energy nonprofit Energy Web Foundation (EWF) are jointly building a blockchain-based renewables platform.
- Energy trading on blockchain- Power Ledger’s blockchain-based energy trading applications are now under pilot testing in a number of sites across its home country of Australia, as well as several other countries, including Thailand.
Thailand has a strong crypto market base, as it currently sees the world’s second-highest cryptocurrency ownership rate. 2019 has been labeled as Thailand Investment Year’, with up to 50% corporate income tax reduction for investment in digital services.
Although the country’s technological infrastructure lags behind neighboring countries, such as Singapore and Malaysia, we see the regulators been the most proactive in learning and supporting the space. Once ICO portals are fully operational and STO regulations are mature, local companies including major players will have sufficient confidence in the local market to undertake STOs, with real estate tokenization expected to lead the way for the market.
Nevertheless, there is currently a lack of blockchain-skilled developers, resulting in the need for market players to hire foreign developers. It is more expensive for Thai companies to hire local developers compared to their counterparts in other SEA markets, notably those from Vietnam, where the services of blockchain-skilled developers are more affordable due to the bigger talent pool there.
We see that blockchain adoption and use in Thailand will be led by the retail industry and financial services, particularly for loyalty programs, and financial services, respectively, such as P2P loans and credit scoring facilities.