Thailand’s Revenue Department is set to propose that the cabinet amend the revenue code so they may classify cryptocurrencies as digital assets and tax them at a 10% capital gains rate.
The authority to initiate the regulations is derived from a ‘royal degree’ to more comprehensively regulate cryptocurrencies and ICOs. A royal degree empowers the government to act on issues that concern public safety. In this case, power will be handed to the county’s SEC to regulate all aspects of cryptocurrencies since hence forth, “virtual coins will be classified as digital assets, not currency” within the country. Deputy Prime Minister Somkid Jatusripitak aims to issue the new law by the end of the month.
The business community has not received the news well. Adisak Sukumvitaya, chief executive at Jay Mart Plc, said the government “should announce a clear picture for the cryptocurrency regulatory [framework] at one time rather than gradually [unveil] the framework in bits and pieces.” In addition, those that seek to trade outside the country would also face money laundering when repatriating the funds.
Could Thailand’s plans of regulations strike the right balance?
Since cryptocurrency regulations are a hot topic with governments around the world, it is important to study each country’s proposal and analyze its potential.
Since Thailand’s ‘royal degree’ is used to maintain public safety for emerging issues, then it follows that Thailand’s cryptocurrency regulations are grounded in public safety concerns. Aside from raising revenue, a tax can have two possible effects. First, it decreases usage, but does not eliminate the perceived threat. Second, it pushes activities into black markets, which are in fact more dangerous since they lack proper court arbitration. Thus, Thailand’s proposed tax law cannot eliminate their feared public safety concerns.
Thailand’s government appears to not as of yet determined the exact regulations their SEC will pursue. Their final decision will make a huge difference. Certain types of regulations can make an argument that they are effectively protecting consumers, however, other regulations can actually make consumers more prone to risks. If the regulations act as a tax (unnecessarily increase the cost of using crypto) they will still push usage into black markets. If regulations shift consumer actions, it could create moral hazards and bring more risks and loses to consumers and the public at large. These concerns beg the question if the proposed solutions could actually make problems worse by not recognizing the true developments being made in the cryptocurrency space.
Dash aims to be as clear as possible, eliminating the need for regulations
Not all cryptocurrencies are created equal since Dash has made deliberate efforts to set itself apart from others by offering clear and fair value to help consumers without government intervention. Dash adoption by consumers around the world to compliment their presently unsatisfactory national currencies and banking choices signals that they have been ignored by their governments under the previous epoch. The emphasis that Dash places on helping people live more confidently by means of more affordable, faster, and safer transactions than current alternatives will hopefully deflect regulatory ire. Regulators are afraid that the public is not smart enough to discern poor investments in ICOs or cryptocurrencies with little infrastructure and thus need protections.
Even if that is true, Dash has very strong infrastructure and clear road maps on how it will grow over time setting itself apart from other cryptocurrencies that lack such infrastructure. In addition, Dash is very open with information so those that buy into the Dash network are very aware of what they are getting. These two features of Dash eliminate the purposed threats government officials see in cryptocurrencies.