Keeping Up With Crypto

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Thailand’s digital financial services industry is doing well when retail giants have integrated cryptocurrency into their business transactions.

The trend is a major challenge for government and regulators in managing and balancing growing risks and developing the digital ecosystem in light of the growth of digital asset transactions.

Last week, The Mall Group Co, operator of The Mall, The Emporium, Paragon and EmQuartier, partnered with Bitkub Capital Group Holdings, which has the largest share of the Thai cryptocurrency market. The joint venture is expected to boost the digital asset ecosystem in Thailand.

The group is expected to allow customers to use seven cryptocurrencies, including Bitcoin, Ethereum and Bitkub’s KUB Coin in exchange for products and services in its department stores without transaction fees.

Siam Piwat Co, the operator of major retail destinations – Siam Paragon, Siam Center, Siam Discovery and a joint venture partner in ICONSIAM and Siam Premium Outlets – has also entered into a collaboration with XSpring Capital Plc, a major supplier integrated financial services, integrate digital assets, including crypto-currencies, for the group’s shopping centers.

Meanwhile, Central Retail Corp (CRC), Thailand’s largest shopping mall developer, has launched a digital currency “C-Coin” that will be offered to customers and the public once the so-called sandbox phase is over. The company distributed the digital part to its 80,000 employees worldwide as a prototype.

Besides retail businesses, there are many other companies that have established partnerships to accept major cryptocurrencies as a means of payment for their goods and services. This move stimulates the use of cryptocurrencies in everyday life, and not just as assets for investing.

While cryptocurrencies offer key benefits – more transparency through the oversight of blockchain technology and lower transaction costs through the elimination of middlemen – digital coins, however, present a risk of high volatility for consumers, investors and traders.

The Bank of Thailand on Wednesday cautioned the public against using digital assets as a means of payment for goods and services as cryptocurrencies have shown high price volatility and pose a risk of cyber theft.

The central bank’s reaction is understandable because it is bound by law. Under the Currency Act, section 9 of the Act provides that no one shall manufacture, issue, use or put into circulation objects or tokens for money, except with the authorization of the relevant minister.

The law aims to stabilize the financial system. However, the digital asset industry is growing at an exponential rate and, like it or not, regulators cannot stop it.

In Thailand, cryptocurrency has no legal status. It is defined as a type of electronic data unit developed on an electronic network for the purpose of being a medium of exchange for goods, services or rights. Unlike some other countries, cryptocurrency is not even defined as a personal asset. This could create legal problems when a dispute arises in its transactions.

Regulators around the world are struggling to manage the extraordinary growth of digital assets by adapting existing approaches. The promise of advanced social media platforms such as the Metaverse will translate into explosive growth in the digital asset market. Effective and up-to-date laws and regulations are needed to keep pace.

Editorial

Bangkok Post Editorial Column

These editorials represent the Bangkok Post’s reflections on current issues and situations.

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