In line with the government’s take on cryptocurrencies, Thailand’s finance minister has said recent “excessive speculation” in the crypto space could end up affecting the economy.
Crypto Is Harming Capital Markets In Thailand
In a capital market conference, Arkhom Termpittayapaisith remarked that the recent crypto craze could end up affecting the country’s stock market adversely.
Quoting data to support his claim, he said crypto transactions in regulated Thailand exchanges exceeded 65 billion baht (about $2.17 billion) in January alone. This is a huge rise from 19 billion baht (($600 million) recorded a trading volume of December 2020.
Bitcoin has seen its price break new records since it crossed its previous ATH of $20k in 2020. It’s not unusual for investors to expect another parabolic rally from Bitcoin. And the phenomenal returns investors earn regularly keeps drawing more people into space.
Thailand’s young and adventurous retail investors are quickly moving their funds from the more conventional stock market to digital currencies and this is making the government uneasy.
Arkhom said this uneven movement of money exclusively into the digital space could harm an already fragile economy. He further demonstrated with retail investors to be wary of the high volatility that comes with trading virtual currencies saying a wrong move could wipe an average Tai’s savings out.
Another popular Tai critic of cryptocurrencies is Ruenvadee Suwanmongkol, the secretary-general of Thailand’s Securities and Exchange Commission. Ruenvadee earlier warned investors from staking their money on virtual assets citing high volatility. He however recommended a 10% rebalancing of an investor’s portfolio if it is absolutely necessary.
Leave Crypto Out, Bring Blockchain In
The Thailand government has been quite stern in its stance on cryptocurrencies. Late last year it set out to launch a digital assets platform in its stock exchange and clearly omitted cryptocurrencies citing money laundering as a concern. It also said crypto assets like Bitcoin do not meet its three-tiered criteria of being a valuable product that can support economic activities, benefit the society and environment, or even be analyzed on what value they create by prospective investors.
Although the Securities and Exchange Commission (SEC) of Thailand has found it hard to open its arms to Bitcoin, it has remained favorable towards blockchain technology. Thailand’s Excise Department announced last year that blockchain technology will be used in revenue collection and tax refunds. The Thai government is also exploring the concept of a central bank digital currency (CBDC).
It has not entirely banned crypto use as crypto exchange platforms are currently running in the country but it has been very inflexible in its stringent regulation of crypto transactions and closed a crypto exchange after a series of shutdowns.