Thai financial authorities are seeking the public’s feedback on a crypto sandbox pilot program for tourists aimed at enhancing the country’s appeal as a tech-savvy destination by providing more convenient and flexible payment options.
SEC, BOT Launch Sandbox Program For Tourists
This week, Thailand’s Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) introduced a crypto sandbox pilot to facilitate the conversion of digital assets into Thai Baht for the spending purposes of foreign tourists. The regulatory agency also released a consultation paper, asking for feedback on the program.
According to the announcement, the initiative aims to promote innovation and the use of digital assets to boost the economy and tourism industry by providing more options and convenience for tourists holding cryptocurrencies.
The sandbox will allow individuals to exchange their crypto assets through licensed operators and use the converted Thai Baht to buy goods and services via e-money service providers.
“This initiative builds upon the existing ecosystem covering both the digital asset trading system and electronic money (e-money) system, while maintaining appropriate and adequate risk protection measures,” the SEC explained.
Under the pilot program, interested foreign tourists would be required to open an account and transact through sandbox participants, the digital asset operators under the SEC’s supervision, and e-money business operators under the BOT’s supervision.
The sandbox includes “appropriate control, supervision, and risk preventive measures through relevant regulatory agencies, without allowing digital assets to be used directly as a means of payment for goods and services at merchants.”
Eligible participants, such as digital asset exchanges, digital asset brokers, and digital asset dealers, are required to apply to the program and operate under the sandbox framework. After approval, they will be able to provide services to foreign tourists and temporary residents in Thailand for up to 18 months.
They must also conduct Know Your Customer/Customer Due Diligence (KYC/CDD) procedures under the Anti-Money Laundering Office’s (AMLO) criteria and provide digital asset exchange services according to the type of license granted by the SEC.
Additionally, they must establish connectivity with regulated e-money operators to enable foreign tourists to use the converted Thai baht for purchases through electronic channels, including QR code scanning.
Sandbox participants must also comply with relevant criteria, including collecting and evaluating user data, using blockchain forensics tools to identify illicit transactions, reporting information to the SEC, and preparing exit plans from the sandbox.
Thailand’s Crypto Hub Dream
On Thursday, the chief executive officer (CEO) of Binance Thailand, Nirun Fuwattananukul, told local news outlet The Bangkok Post that “This crypto sandbox builds directly upon former premier Thaksin Shinawatra’s Phuket sandbox proposal from late last year.”
He explained that the two proposals shared the “core concept of allowing Bitcoin and cryptocurrencies as payment methods in tourist areas to drive adoption.” However, the new sandbox proposal is not limited to Phuket, but a nationwide program.
Fuwattananukul considers that the two initiatives differ in their implementation, with the original proposal being conceptually and regionally focused. Meanwhile, “this initiative has formal backing from Thailand’s primary financial regulators. This represents an evolution from an experimental concept to a structured regulatory framework with proper oversight.”
The CEO highlighted Thailand’s “consistent vision” and “commitment to leading cryptocurrency adoption in the region while ensuring consumer protection and compliance standards.”
A month ago, Thailand’s Deputy Finance Minister Julapun Amornvivat unveiled a plan to drop the capital gains tax on cryptocurrencies for five years. As reported by Bitcoinist, the Finance ministers announced that, starting January 1, 2025, until December 31, 2029, crypto investors who sell their assets won’t have to pay taxes on the profits.
Additionally, the SEC proposed rule changes in June to provide crypto exchanges with flexibility while enhancing investor protection and oversight, including allowing digital asset platforms to list their utility tokens or tokens issued by affiliated entities.
