Anika Begay
Amid the rapid adoption of cryptocurrencies and the growing need for regulation in their respective regions, Thailand’s financial regulators announced on August 9th the launch of a “regulatory sandbox” designed to “test and refine” cryptocurrency services.
This launch of a regulatory sandbox comes against the backdrop of the country’s Securities and Exchange Commission’s (SEC) phased-in approach, which began earlier this year. The announcement noted:
In early March, the SEC Board passed a resolution approving in principle the establishment of the Digital Asset Regulatory Sandbox. Later in May, the SEC held a public hearing on this topic to gather comments and input from the public and stakeholders. The majority of respondents agreed with the principles and proposed changes to the existing regulations.
The regulator added that following these steps, a “regulation will be issued that determines the characteristics of eligible services, the qualifications of participants, and the scope of the Sandbox experiments.”
Insights into the Sandbox Initiative
The cryptocurrency regulatory sandbox launched today by the Thai SEC is not only seen as a response to global interest in digital assets and their “transformative” potential for the financial sector, but also serves as an “experimental” framework for companies to pilot their cryptocurrency-related services without the immediate pressure of full regulatory compliance.
In the announcement, the SEC noted that the sandbox is open for applications starting today, encouraging innovators in the digital asset space to participate.
According to the SEC, in addition to being a testing ground, the regulatory system would also promote “innovative development in the capital market within a flexible regulatory framework”.
The SEC has also outlined specific rules for the sandbox. These include eligibility criteria for participants and the scope of experiments allowed.
Additionally, services eligible for testing include various digital asset initiatives, such as exchanges, brokers, dealers, fund managers, advisors, and custodial wallet providers.
Participants must also clearly define the scope of their services to mitigate potential risks. Experiments within the sandbox can last no more than one year from the date of approval, with provisions for possible extensions if necessary.
Cryptocurrency Position in Thailand
Thailand’s stance on cryptocurrencies has so far been welcoming compared to other regions. Before the current cryptocurrency regulatory sandbox, the country tried to be friendly with its approach to the cryptocurrency market.
Thailand’s Ministry of Finance has waived value-added tax (VAT) on cryptocurrency trading in February. The announcement said the move was made “to push Thailand to become a digital asset hub.”
The Ministry of Finance has announced VAT exemption on digital asset transactions to boost capital mobilization through digital assets in a bid to transform Thailand into a regional hub for digital assets, says Paopoom Rojanasakul, secretary to the Ministry of Finance. #ThaiPBSWorld #Thailand #VAT
— Thai PBS World (@ThaiPBSWorld) February 6, 2024
Featured image created with DALL-E, chart from TradingView
