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Cryptocurrency News Articles
Bitcoin Surges to Record High Following Trump's US Election Victory
Dec 23, 2024 at 07:32 am
The debate over Bitcoin resurfaced in Thailand after remarks made by former premier Thaksin Shinawatra at a Pheu Thai Party seminar last week.
Bitcoin's record-breaking surge to US$106,000 following Donald Trump's US presidential election victory has reignited the debate over cryptocurrency in Thailand, especially after remarks made by former premier Thaksin Shinawatra at a Pheu Thai Party seminar last week.
Mr Thaksin proposed adopting Bitcoin in a restricted area first, such as utilising a sandbox pilot project in Phuket to encourage digital currency holders to spend their digital money in the country. He also raised the idea of creating a stablecoin backed by government bonds.
However, this proposal has sparked concerns, with the Thailand Development Research Institute (TDRI) warning that the project could falter due to the inherent volatility of digital currencies.
Additionally, the idea of a government-backed coin risks adding confusion to the economy, as it would potentially create a new unit that would compete with the baht.
According to TDRI, the central banks of many countries are generally opposed to such steps, fearing they could undermine confidence in local currencies and complicate their usage.
RISKS TO THE BAHT
Investment strategists believe the possibility of Thailand using Bitcoin or other digital coins as a medium of exchange similar to the use of the baht is low, saying it would pose risks to the stability of the baht and confidence in the country's financial system.
They believe Thailand must first await the results of experiments in leading economic nations before making a final decision.
The Securities and Exchange Commission (SEC) launched a regulatory sandbox in August allowing selected service providers to experiment with digital assets under relaxed regulatory scrutiny.
Thanathat Srisawast, a strategist at Tisco Economic Strategy Unit (ESU), said if a policy were implemented that allowed for Bitcoin usage, Thailand would move ahead of the US by allowing the use of Bitcoin as a legitimate medium of exchange in the way that El Salvador does.
He believes some shops in Thailand have already accepted Bitcoin in exchange for baht.
"If we want to go ahead with it seriously, it is not necessary to use a sandbox only in Phuket. It should be open for testing everywhere. Some foreign tourists have already used Bitcoin in exchange for baht," said Mr Thanathat.
"If Bitcoin could be used for payments, the process must not be complicated. Also, we might need to wait for the supply of digital currencies in the system to increase first before we carry out a test of using digital coins instead of the baht," he noted.
To support that policy, Thailand must create a coin that resembles a central bank digital currency (CBDC), a form of digital currency issued by a country's central bank, he said.
It resembles a cryptocurrency, but its value is fixed by the central bank and is equivalent to the country's fiat currency.
It also needs to have a strong security system and needs a backup plan in case the internet system crashes, he added.
"The former premier may have seen that many people are interested in Bitcoin, so he thinks this is the right time to push through such a policy," he said.
In his view, Thailand might first need to examine the lessons learned in other countries because if the country were to make a mistake in rolling out such a policy, it would damage the credibility of the government and the Bank of Thailand. Therefore, the country must consider it carefully.
"If we try to do it in a small project like a sandbox, if there is a mistake, it can still be controlled and if it doesn't work, we can just stop the project," said Mr Thanatat.
Meanwhile, the reason behind the proposal for issuing a coin backed by government bonds has not yet become fully apparent.
"Maybe the government want to encourage the use of Bitcoin and other digital currencies. It is very difficult to guess what form it would take. We will have to wait for further details."
Mr Thanatat said he believes Bitcoin investments will continue to grow next year, thanks to President-elect Trump's policy to support it. But, according to a recent survey, some Bitcoins have been mislaid, or cannot be recovered.
Several early adopters of Bitcoin say they do not collect them seriously and it is estimated that around 5 million Bitcoins have been "lost".
It has been estimated that there are over 10 million Bitcoins currently in circulation. New mining each year accounts for around 100,000 coins each year. If the US seriously promotes Bitcoin, other countries may follow the trend adopted by the world's major economic power, he said.
Asadej Kongsiri, president of the Stock Exchange of Thailand (SET), said the SET so far has no policy to support cryptocurrency trading. However, the bourse is studying the possibility of developing Thailand into a digital token trading centre.
NO CLEAR BENEFITS
Phuket has been put forward as a candidate for the pilot project, which would enable cryptocurrency holders to spend their digital coins for transactions carried out within the province.
Thanet Tantipiriyakit
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