Though countries in Asia Pacific are racing to build their own cryptocurrency hubs -- Jeju Island in South Korea or Cagayan in the Philippines are among them -- they are arguably playing catch-up: Thailand has one of the most prosperous cryptocurrency ecosystems in the region, thanks in large part to the government.
Local leaders have been very forward-thinking in integrating cryptocurrency into the mainstream, going so far as to plan a central bank digital currency (CBDC) by 2019.
While Thailand's success in the cryptocurrency industry ought to be celebrated, the country can take advantage of its momentum to achieve something even more valuable: It can be a hub for blockchain development, innovation, and entrepreneurship.
Blockchain, of course, is the technology at the centre of cryptocurrency, though many in the public mistakenly confuse the two. To clarify: blockchain is the public ledger, and digital currencies are just one of its many applications.
BIGGER THAN CRYPTO
Since blockchain will be much bigger than just crypto, it makes sense for Thailand to position itself to thrive in this technology. As with its rise to prominence as a cryptocurrency hub, Thailand's bid to become a centre of blockchain will be driven from the top down.
Government leaders and policymakers must continue to adopt regulations that are blockchain-friendly and actively encourage both local people and foreigners to create products with the technology.
Adopting a blockchain-friendly stance is, of course, easier said than done. Since blockchain is a public ledger, most of the applications that utilise it will seek to decentralise control away from incumbent companies and organisations, which will fight to the last breath to maintain the status quo.
To support blockchain innovation, Thai government leaders may thus have to resist powerful institutional forces that policymakers in other countries might try to follow. They will have to find strength in their highest calling as leaders: Advancing what's in the best interests of the people.
It's challenging to understand just how much blockchain can upend traditional industries until you look at some of the companies using the technology in the region. Electrify in Singapore, for example, is developing what it calls its own ecosystem. Consumers will be able to engage in peer-to-peer energy trading, while businesses will be able to create smart contracts for retail electricity.
Rather than shun a company like Electrify, as other countries in the region possibly will, Thailand needs to develop policy that allows these innovators to fairly compete with incumbents.
Most blockchain innovations are still in development like Electrify, which is a positive for regulators: It provides more time to create regulation that is both friendly and fair.
DISRUPTING TELECOMS
Thailand can make an even bigger claim to be the blockchain hub of the region by working with innovators who already have live products. One such example is Pundi X from Indonesia. Though the company is known for its crypto-enabled point-of-sale terminals, Pundi X recently introduced a blockchain-based smartphone, the XPhone.
People who buy the XPhone -- scheduled for release in the second quarter of 2019 -- will be able to make calls, send messages and transfer different types of data without the need for a carrier, as it will run on a proprietary blockchain system dubbed Function X.
The XPhone, then, could truly disrupt telecommunications as we know it today, as it will enable users to communicate without the carrier intermediary. Though it may be challenging to establish policies and regulations around this new field of decentralised communication, the Thai government could still do so, just as it has for crypto.
Welcoming the XPhone innovation into its borders, along with other blockchain-based phones sure to follow Pundi X's lead, will be a positive message to other companies around the world: Thailand is eager to work with anyone who aims to use blockchain technology to change the world.
Thailand's branding as a blockchain-friendly environment -- even in hotly contested industries such as energy and telecommunications -- will attract innovators from all over the world. Soon you might see companies setting up shop in Thailand using the blockchain to innovate real estate, digital rights, health care, supply chain, and everything in between.
Since blockchain may very well be the defining technology in the next generation of the digital economy, Thailand should focus on setting up this advantage.
Kayie Natividad is an IT consultant to the business process outsourcing industry, and also takes an active interest in e-commerce, with plans to launch her own business next year.