Electrified: Thailand’s Surging Digital Economy

Itiporn Lakarnchua

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In our last look into digital assets and electronic transactions, we outlined Thailand’s ready adoption of and openness to digital payment systems, financial technologies, and cryptocurrencies.

Barely a year since, it has become clear that morning has well and truly broken for the digital economy in Thailand, with government, private sector, and consumer support converging in the nation to accelerate the transition to a digitally-based financial system.

Exchange platform excitement

The first indication of the digital economy’s maturation in Thailand are the seemingly daily additions of cryptocurrency and blockchain-related businesses and projects, as well as the success of major players in the space.

Thai-based exchanges for cryptocurrency, such as Bitkub and Satang Pro, have become household names practically overnight, with trading volumes in the hundreds of millions of US dollars.

Bitkub Online has partnered with the creator of USD Coin, Circle, to promote knowledge and understanding among investors on digital assets, affirming the potential seen in the Thai market for the trading of cryptocurrencies.

Thailand's cryptocurrency exchange platform "Bitkub" logo on a mobile phone screen
Source: TongRoRo / Shutterstock.com

Beyond exchanges, this list by Bangkok Biz News shows 22 Thai-based firms entering the digital finance space. AJ Advance Technology announced a THB900 million investment in bitcoin mining, Country Group Holdings took a 25% stake in Cryptomind Group, GMM Grammy entered into partnerships to present its music catalog in the form of NFTs (🇹🇭), and Jasmine Technology Solutions repositioned itself completely as a digital assets firm.

Even leading real estate developers Sansiri (🇹🇭), SC Asset (🇹🇭), and Ananda Development have launched blockchain-powered projects.

An appetite for digital assets

A customer using QR code payment to pay
Source: Auttapol Tatiyarat / Shutterstock.com

Since our assessment that “Thailand’s digital economy is just on the horizon” with electronic transactions making up 24.2% of the GDP in 2019, digital payments have rocketed into the mainstream, with the number of people making e-payments rising by 8.7% from 2021 to a total 36.79 million individuals in a population just shy of 70 million.

A study by ACI Worldwide, Global Data, and Centre for Economics and Business Research found Thailand recorded 9.7 billion real-time electronic payment transactions in 2021, behind only economic giants India and China.

Overall, 31.4% of Thai citizens use a banking, investment, or insurance website or mobile app on a monthly basis and 36.2% use a mobile payment service each month.

Most notably, the Digital 2022 Global Overview Report revealed Thailand as a global leader in terms of the proportion of internet users who own cryptocurrencies, with 20.1% of Thailand’s netizens between 16–64 years of age holding some form of cryptocurrency.

Deputy government spokesperson Ratchada Thanadirek attributed the hike in these numbers to adoption of e-payment by people of all ages and businesses of all scales, along with the country’s comprehensive payment infrastructure.

Thailand's G-wallet app on a mobile phone screen
Source: NOTE OMG / Shutterstock.com

“The widespread adoption of real-time e-payment is a result of the national e-payment policy which was first introduced in 2015,” she explained. “Since then, we have launched several successful projects that use the e-payment infrastructure, including the state welfare card, government wallet [G-wallet], and the Pao Tang application.”

Most importantly, the deputy spokesperson stated, “This policy has helped the public and business sector with economic activities, which will eventually enhance people’s quality of life, boost the country’s competitiveness, and improve the ease of doing business in Thailand.”

The latest example of the Thai state’s promotion of digital financial tools came in April, when the Government Lottery Office (GLO) began using the Pao Tang mobile application to sell its lottery tickets digitally.

By offering the tickets through the state-operated mobile application, the GLO was able to ensure the official retail price was maintained while also serving buyers looking for a cashless payment option.

State-fostered fintech

The digitized lottery was just one of the more recent signals from the government of its bullish outlook in digital assets and financial technology.

In March of this year, relaxed tax rules were announced for the trading of cryptocurrencies until the end of 2023 with the explicit purpose of supporting the digital assets space.

The leniency includes value-added-tax (VAT) exemption for trades of digital assets on government-approved exchanges and the ability to deduct losses from crypto trading from taxes due on gains.

One of the most indicative examples of official acceptance, however, is the Bank of Thailand’s (BoT) pilot plan for a Central Bank Digital Currency (CBDC), which is slated to launch later this year.

BoT Governor Sethaput Suthiwartnarueput, speaking to Coindesk, said, “We see it as putting in place the infrastructure that the private sector can innovate on, making sure that whatever platform they innovate on is controllable.”

BoT Governor Sethaput Suthiwartnarueput speaking
Source: Bank of Thailand Facebook Page

This year’s pilot is to test deposits, withdrawals, and transfers using the CBDC, viewing it as “an alternative payment method for ‘cashlike activities within a limited scale.’” The BoT will also allow the private sector and the public to participate in presenting business use cases for Retail CBDC via a “CBDC Hackathon.”

Once the test is carried out, it will put Thailand ahead of Europe, which has slated its CBDC test for 2023, while better positioning the nation to take part in the Multiple CBDC (m-CBDC) Bridge Project, which involves China, the United Arab Emirates, and Hong Kong.

Digital economy discretion

Where the Thai state has hindered financial technology growth, it has done so with the intent of avoiding possible pitfalls.

Just as it announced more conducive tax laws for cryptocurrencies, the government disallowed the use of such currencies for the payment of goods and services. The decision was made to keep Thai regulations aligned with those in Europe, the U.K., South Korea, and Malaysia.

In a display of readiness to take action where needed, the Securities and Exchange Commission’s (SEC) imposed fines on Bitkub Online, accusing it of non-compliance with digital asset listing rules and failing to take into account the conflict-of-interest protection measure when listing its own KUB Coin.

While these instances may appear to show some resistance, they are actually a reflection of Thailand’s awareness of the power of the digital economy and the need to harness that power with mindfulness. These rare examples have only served to keep Thailand on a path toward genuinely benefitting from the era of digital finance.

The digital revolution in full swing

A hologram of a stock market chart over a panoramic cityscape of Bangkok
Source: VideoFlow / Shutterstock.com

The era of the digital economy has begun in earnest in Thailand with the nation’s government devoting significant attention to empowering citizens to reap the utmost benefit.

Thailand’s embrace of digital assets, electronic payment, and cryptocurrencies has put it at the forefront of the revolution towards digitized finance now taking place globally and made it an ideal regulatory environment for crypto entrepreneurs and those ready to join the crypto revolution.

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Itiporn Lakarnchua

A radio producer, newscaster, and communications consultant, Itiporn, or Van, graduated with a Master’s in Bilingual Education from Rangsit University and has produced media programs and marketing collateral for major Thai and international corporations. His work spans a range of industries, including civil aviation, hospitality, real estate, food & beverage, and tourism.

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