Bank Of Thailand Delays CBDC Adoption And Crypto VAT

In a recent update, Thailand’s central bank will go slow on CBDC testing and issuance. The Bank of Thailand (BoT) believes the country has enough payment options for online payment.

Sethaput Suthiwartnarueput, the governor of the BoT, “the issuance of CBDC is not a top priority.” He made the statement at the WEF Annual Meeting in Davos.

The governor stated that the financial institution would continue its trials on retail CBDC. The trial will continue till Q4 2022. Meanwhile, it will test only withdrawals, fund transfers, and deposits. The central bank will limit the testing for now.

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The BoT has shunned the usage of decentralized cryptocurrencies. The central bank even banned the use of cryptos for payment purposes.

BoT Satisfied With Existing Payment Options

Suthiwartnarueput stated that the country is content with its current payment options. Presently, the country uses Promptpay and QR codes for online payment.

He added that blockchain usage could lead to serious security breaches. These risks could arise from smart contracts or blockchain design.

The state government created the initiative called “Thailand 4.0.” The aim was to promote the development of mobile technology. 

Unfortunately, the elderly population can not use most QR-code-based systems. This is because it requires some level of technological knowledge. As a result, it has not been effective. 

In 2018, the BoT created a proof-of-concept initiative to test cross-border payments. The Bank of China and Hong Kong Monetary Authority were part of the program. Unfortunately, the program has remained in the testing stage for four years. There has been no further development.

The central bank governor believes there is no need to rush CDBC adoption. He noted that the country might finally issue wholesale CBDC in five years.

Crypto VAT Postponed

On the 26th of May, the crypto community in Thailand received good news. This was after the government pushed the implementation of crypto tax till 2024. Initially, the government introduced a 7% VAT on crypto. However, the country has declared the rest of 2022 tax-free from crypto.

“There will be no tax on digital assets transactions on licensed exchange firms. The new tax proposal will take effect from the 1st of January, 2024.”

Akaradet Diawpanich, Cryptomind’s CEO, noted that the crypto community prefers a total removal of the tax. He said that taxation is preventing investors from having digital asset investments. 

As a result, Diawpanich called for the complete removal of the levy on crypto gains and profits. Meanwhile, the usage of digital assets for payment purposes is prohibited. 

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