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Amid the rapid adoption of crypto and the increasing need for regulation in respective regions, Thailand’s financial regulators announced on August 9 the launch of a “regulatory sandbox” designed to “test and refine” cryptocurrency services.
This regulatory sandbox launch comes against the backdrop of the country’s Securities and Exchange Commission (SEC) step-by-step approach, which began earlier this year. The announcement noted:
Earlier in March, the SEC Board passed a resolution approving in principle the establishment of the Digital Asset Regulatory Sandbox. Later in May, the SEC conducted a public hearing on this matter to gather comments and suggestions from the public and stakeholders. Most of the respondents agreed with the principles and the proposed amendments to the governing regulations.
The regulator added that following these steps comes the issuance of “regulations determining the characteristics of eligible services, the qualifications of participants, and the scope of the Sandbox experiments.”
Digging Deep Into The Sandbox Initiative
The crypto regulatory sandbox launched by the Thailand SEC earlier today is not only seen as a response to the global interest in digital assets and their “transformative” potential for the financial sector but also serves as an “experimental” framework for companies to pilot their crypto-related services without the immediate pressure of full regulatory compliance.
In the announcement, the SEC emphasized that the sandbox is open for applications starting today, encouraging innovators in the digital asset space to participate.
According to the SEC, aside from being a testing ground, the regulatory soundbox would also promote “innovative development in the capital market under a framework of flexible regulation.”
The SEC further outlined specific regulations for the sandbox. These include eligibility criteria for participants and the scope of permissible experiments.
Additionally, services eligible for testing include various digital asset ventures such as exchanges, brokers, dealers, fund managers, advisers, and custodial wallet providers.
Participants must also clearly define their services’ scope to mitigate potential risks. The trials within the sandbox are allowed to run for no more than one year from the approval date, with provisions for possible extensions if necessary.
Thailand Crypto Stance
So far, Thailand’s stance on crypto has been welcoming compared to other regions. Before today’s crypto regulatory sandbox, the country has since been trying to be friendly with its approach towards the crypto market.
Thailand’s Finance Ministry excluded value-added tax (VAT) on crypto assets trading in February. The announcement said this move was made “to push Thailand towards becoming a digital asset hub.”
Finance Ministry has announced the exemption of VAT on trades in digital assets, to boost capital mobilisation through digital assets, in an attempt to make Thailand regional digital asset hub, says Paopoom Rojanasakul, secretary to Finance Minister. #ThaiPBSWorld #Thailand #VAT
— Thai PBS World (@ThaiPBSWorld) February 6, 2024
Featured image created with DALL-E, Chart from TradingView
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