Legal expert: Libra may have thorny Thai debut
Libra, the much-hyped digital currency announced by Facebook, could face difficulty entering Thailand because the blockchain-integrated cryptocurrency does not fall under any type of financial legislation, according to a government legal expert.
The cryptocurrency does not fit under the Bank of Thailand's Currency Act because it does not have the characteristics of legal tender as stipulated by law, said Fiscal Policy Office legal officer Sumaporn Manason.
These characteristics refer to a banknote or coin having value in baht or being identifiable as an object or note used to pay debts or exchange with other currencies in accordance with the law, said Ms Sumaporn.
Libra is not a tangible payment medium and the cryptocurrency still does not subscribe to definitions in other laws such as the Payment Systems Act, she said.
Designed to be a "stablecoin", Libra's price fluctuation will be minimised through the use of reserved backing assets designed to provide intrinsic value.
Real-world currency used to buy Libra will go into a reserve backing the digital money, the value of which will mirror stable currencies such as the US dollar and the euro, according to Libra's creators.
Ms Sumaporn said there are three possible scenarios for Libra: an outright ban from financial authorities; no regulation in order to facilitate greater financial inclusion or an indirect attempt to support greater acceptance; and regulation through an intermediary.
There are only 3-5 Thai companies that have the potential to join the Geneva-based Libra Association in the second recruitment phase as there are stringent conditions such as the need for newcomers to have more than 20 million customers or partners, said Bhume Bhumiratana, an adviser at the Securities and Exchange Commission (SEC).
Other major companies are also planning to launch their own cryptocurrencies and blockchain systems, said Mr Bhume.
The Bank of Thailand may have to issue its own digital currency before Libra takes the edge in mass adoption, which would be difficult for the central bank to manage, he said.
Facebook has requested discussions with the central bank because Thailand has 50 million registered Facebook users, but the meeting has not been finalised yet.
The SEC has granted an operating licence to BiTherb, which has become the fourth legally-approved digital asset exchange in Thailand.
BiTherb has also received a licence to operate as a digital asset broker in the country.
The company's operations have not started as the SEC will next examine the final preparations for the operating system.
BiTherb is reportedly a Japanese subsidiary of Tokyo-based Remixpoint Incorporated, which engages in system sales and development business ranging from energy and automobile to finance and travel, according to Asia Blockchain Review and Nikkei Asian Review.
The three businesses previously approved as authorised digital asset exchanges were Bitcoin, Bitkub Online and Satang Corporation. Coins TH was approved as a licenced broker and dealer of digital assets.
The SEC has also approved three companies as licenced ICO portals: Longroot Thailand, T-BOX Thailand and SE Digital.
Longroot and T-BOX have yet to begin operating, while SE Digital has been approved based on a condition that the securities watchdog will have to examine its operations further, according to the SEC.