A draft of qualifications for cryptocurrency investment by the Securities and Exchange Commission (SEC) is sparking heavy criticism from the public as it effectively bars the majority of Thais from trading digital currency by requiring them to have annual income of 1 million baht.
The draft also calls for investors to have at least two years trading cryptocurrency, stocks or futures to be allowed to trade digital currencies.
Investors with less than 1 million baht in annual personal income can qualify if they have a net worth of 10 million baht (not including the real estate value of their permanent residence), or an investment portfolio of over 5 million baht, according to the draft proposal.
Unqualified persons can still purchase stable coins, which are backed by a secure asset such as fiat money, government bonds or gold.
They can also invest in cryptocurrency through a licensed digital asset fund manager, which recently became regulated under the SEC.
A cryptocurrency veteran who requested anonymity said the minimum amount to invest in a managed private equity fund is expected to be 300,000 baht.
"The poor have no rights? Why are the opportunities for the little guy so limited?" one social media user said, reflecting the common attitude of netizens reacting to the draft.
The draft was largely met by strong negative reactions online.
Some people on social media asked whether the qualifications are meant to serve intermediaries in the traditional financial world.
The SEC said this regulatory proposal aims to create an appropriate mechanism for investor protection suitable for the level of risk associated with the digital asset product.
"Cryptocurrency is a financial innovation that is exposed to high volatility," the regulator said in the draft document.
"Investment in this digital asset thus requires knowledge and understanding and a risk profile that is not so sensitive to investment loss."
In the past week, the price of bitcoin and other cryptocurrencies was exceptionally volatile, falling from a high of over US$58,000 to a low of around $45,000 before returning to hover around $50,000, linked to comments by Tesla founder Elon Musk that bitcoin was overvalued.
According to the draft document, Thai crypto traders would also have to pass a knowledge test administered by the asset exchanges, scoring above 80%.
Traders are required to have a minimum of 1,000 baht to open an account.
Archinee Pattamasukhon, assistant secretary-general of the SEC, said the existing unqualified accounts will not be closed, but rather frozen. This means these accounts can sell their assets and withdraw funds, but not buy more cryptocurrency that is not backed by stable assets.
The public hearing period is to last for 30 days until March 27.
In addition, the SEC is scheduled to hold a live talk about the hearing on the SEC Facebook page on March 24.
The qualifications are expected to be implemented in the third quarter of this year.