Digital economy poised to dominate
The digital economy will be a key sector driving Thailand's economic growth and may outweigh the physical economy in value in the next 5-10 years, said Jirayut Srupsrisopa, chief executive and co-founder of Bitkub Capital Group Holdings.
He said financial businesses will enter the 3.0 era at the time and believed paper money will be completely substituted by cashless payments and digital currencies.
"Looking at the history of finance, how people pay and use money has transformed every 50 years and often after a crisis, as exemplified by the prospect of a digital baht and yuan that are expected to be launched for use in 2022," Mr Jirayut said.
Financial institutions and businesses should start adopting new digital financial technology in their businesses because money in the 3.0 era will mostly be run by a computer program and sophisticated algorithms. All financial players must adapt the format to suit the integration of financial technology in the future, he said.
Mr Jirayut said cryptocurrencies will be more widely accepted in the future. They are entering the second phase of development that will establish a transaction protocol allowing cryptocurrency holders to transfer their coins across the country and make payments.
Currently, the total market capitalisation of cryptocurrencies amounts to US$2 trillion. Even though the market is still small compared with the global stock market with a total asset value of $70 trillion and the global bond market with a total asset value of $100 trillion, the cryptocurrency market is still in a nascent stage and has plenty of room for growth.
For investors, cryptocurrencies were considered speculative products, like gold, in the past. However, similar to gold's transformation from a speculative product to a safe haven against market volatility, the role of cryptocurrencies in the money market will also develop in the same direction.
Cryptocurrencies may differ from gold in terms of their higher volatility and as a digital currency they will also liberate users from the traditional monetary system and allow them to transfer money across countries through blockchain technology with full transparency and fewer financial and geographical restrictions, he said.
This year many Thai companies have started to accept cryptocurrencies in trading, such as Sansiri and Ananda Development that accept Bitcoin and other cryptocurrencies as payments for their real estate.
In addition, when the country reopens, tourists will be able to also convert their digital currencies to baht through their local cryptocurrency exchanges if they have opened the stable coin USDP account with the exchanges, he said.
New innovative financial tools will help firms approach a wider range of customers at a very low cost.
There may even be a Bitcoin debit card that functions like a Visa or Master card, Mr Jirayut said.