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Thailand’s Crypto Community Receives a Tough Setback

For a long time, it was thought that Thailand would play a pioneering role in the field of cryptocurrencies and their acceptance. Already in several coffee shops or shopping stores, you could see the crypto tokens accepted as a means of payment. Even the first real estate developers have already advertised that condominiums or houses can be bought with crypto. One also wanted to attract crypto tourism with crypto acceptance.

The pioneering role has now been shattered for the time being.

The Security and Exchange Commission of Thailand announced late last month that the use of cryptocurrencies as a means of payment would be banned from April 1. In January, authorities had said that the use of cryptocurrencies as a means of payment would be regulated, but it was not believed that a ban would occur.

The SEC cites two main reasons for the ban. First, it is concerned about the illegal activities that can apparently be carried out with cryptocurrencies, especially money laundering. Secondly, the Central Bank of Thailand cannot serve as a supervisory authority. The SEC also says that cryptocurrencies do not offer any improvement in payment efficiency due to the high volatility of cryptocurrencies. Furthermore, it claims that crypto transactions incur high fees.

However, trading cryptocurrencies and using them as digital assets will not be banned. These two aspects are very popular among the younger Thai generations. A survey of 20- to 30-year-olds found that one-third of respondents prefer crypto trading to a regular job. Crypto trading offers young people an alternative to earning an income like a working citizen without getting their hands dirty. Here, traders even receive tax benefits from the authorities, as they do not pay 7% VAT on trading at government-approved crypto exchanges. However, one does not get away completely without taxation, because the so-called capital gains tax is due on profits, which is 15%.

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