Keeping up with crypto
Thailand's digital financial service industry is doing well when giant retail businesses have intergrated cryptocurrency into their business transactions.
The trend is a massive challenge to the government and regulators in managing and balancing increasing risks and digital ecosystem development in the light of growing digital asset transactions.
Last week, the Mall Group Co, operator of The Mall, The Emporium, Paragon and EmQuartier, teamed up with Bitkub Capital Group Holdings, which holds the largest share of Thailand's cryptocurrency market. The joint venture is expected to boost the digital asset ecosystem in Thailand.
The group is set to allow customers to use seven cryptocurrencies including Bitcoin, Ethereum and Bitkub's KUB Coin in exchange for products and services at its department stores with no transaction fees.
Siam Piwat Co, the operator of leading retail destinations -- Siam Paragon, Siam Center, Siam Discovery, and a joint venture partner in ICONSIAM and Siam Premium Outlets -- also entered a collaboration with XSpring Capital Plc, a leading integrated financial service provider, to integrate digital assets, including cryptocurrencies, for the group's shopping centres.
Meanwhile, Central Retail Corp (CRC), Thailand's biggest shopping centre developer, has launched a "C-Coin" digital currency which will be offered to customers and the public once the so-called sandbox phase is complete. The company has distributed the digital coin to its 80,000 employees globally as a prototype.
Beside retail businesses, many more companies have rolled out partnerships to accept major cryptocurrencies as payment for their goods and services. The move is boosting the use of cryptocurrencies in daily life -- not just as assets for investing.
While cryptocurrencies offer key advantages -- more transparency through blockchain technology monitoring and the reduction of transaction cost thanks to intermediaries being removed -- digital coins do, however, pose a risk of high volatility to consumers, investors, and business operators.
The Bank of Thailand on Wednesday warned the public about using digital assets as payment for goods and services as cryptocurrencies have shown high volatility in prices and pose a risk of cyber theft.
The central bank's reaction is understandable because it is duty-bound to the law. Under the Currency Act, its Section 9 stipulates that no person shall make, issue, use or put into circulation any material or token for money except by authority of the minister concerned.
The law is aimed at stabilising the financial system. However, the digital assets industry is growing at an exponential rate and, like it or not, regulators can't stop it.
In Thailand, cryptocurrency lacks legal status. It is defined as just a type of electronic data unit developed on an electronic network with the purpose of being a medium of exchange for goods, services or rights. Unlike some other countries, cryptocurrency is not even defined as a personal asset. This could create legal problems when a dispute occurs in its transactions.
Around the world, regulators are struggling to handle the extraordinary growth in digital assets by adapting existing approaches. The promise of advanced social media platforms such as the metaverse will translate into explosive growth of the digital assets market. Efficient and updated laws and regulations are needed just to keep up.
Bangkok Post editorial column
These editorials represent Bangkok Post thoughts about current issues and situations.
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