During the course of yesterday, a somewhat less than positive consensus became apparent as one of the most important regions for modern, decentralized financial services became the subject of scrutiny from the cryptocurrency community.
Thailand, a nation with a rapidly developing official and unofficial economy which is home to nearly 70 million citizens, has caught attention of those who consider its authorities to be introducing restrictive measures with regard to the method by which peer to peer financial transactions are conducted.
Should any parameter change within Thailand, there is most certainly cause for discussion as it is estimated that 10% of the Thai own some form of cryptocurrency representing the second-highest crypto ownership rate in the world, second only to South Africa’s 10.7%.
Not only is Thailand a bastion of entrepreneurism and a nation that has absolutely embraced cryptocurrency as a payment method as well as a means of storing value, but it is also part of one of the most important regions in the world for the advocacy and use of digital payments and cryptocurrency trading, that being the Asia Pacific region.
A news report in the Bangkok post yesterday revealed the intention of Thailand’s financial markets regulatory authority, the Securities and Exchange Commission (SEC) to invoke laws requiring all decentralized finance (DeFi) projects to be licensed in the same way as all other financial services entities in Thailand.
“The issuance of tokens must be authorized and overseen by the SEC and the issuer is required to disclose information and offer the coins through the token portals licensed under the Digital Asset Decree” stated the SEC yesterday.
It has been taken as read that these regulations will only apply to Thai firms, and that due to its peer to peer nature, Thai investors will be able to store and trade their coins via trading venues internationally over which the SEC has no jurisdicition, however the relatively bearish reception that this announcement has received is perhaps a little unjustified, as there is an upside.
The drive toward regulation by governments is one thing, but the drive toward regulation and being part of a regulated environment in a nation that recognizes cryptocurrency as a regulatable asset class is perhaps a direction which currency exchanges can explore.
It could well be that the DeFi industry which is far more avantgarde than the traditional banks whose legacy systems are the subject of continual requirements for lengthy upgrades may outpace the centrally operated financial markets in areas such as Thailand in the future, as the innovation and rapid pace of development is very attractive to many entrepreneurs in the region.
Coinmetro is an ardent advocate of regulation for cryptocurrency exchanges, and we operate under the auspices of the Estonian Financial Intelligence Unit.
The emergence of new technologies which not only underpin the storage and trading facilities for cryptocurrency but are constantly being evolved and developed in order to further the cause and versatility of digital assets mean that regulators need to be astute and knowledgeable with regard to the constantly evolving ecosystem but also need to be able to work with exchanges and DeFi operators to form the future of the modern financial sector globally.
Within Thailand, most DeFi transactions are not managed by local Thai companies and the borderless, completely ‘sky is the limit’ opportunity to modern business afforded by DeFi environment offers is central to its attraction and popularity.
Similarly, most DeFi developers are operating anonymously within the country, however with the advancement into the mainstream and a defined framework, they may flourish as known entities as time goes on.
There are not many financial services or financial technology industry sectors in which those who use it on a day to day basis are those in charge of its destiny and evolution.
It’s a great time to be involved in the fomentation of the financial future!