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Beware of an Overseas Crypto Scam, Thai Regulator Stipulates

The Thai Securities and Exchange Commission (SEC) has unraveled the latest crypto scam whereby potential investors are coerced into functioning with overseas companies.

According to the Bangkok Post, the Thai regulator is knowledgeable about various illegitimate companies taking part in the purported scam identified as FX trading corporation. Notably, this entity does not have any jurisdiction in cryptocurrency trading. The regulator has also asserted that the losses endured are unknown.

The SEC has affirmed that only three Thai firms are permitted to carry out digital asset operations. Moreover, the services of crypto dealership or brokerage have been authorized to a single company.

According to the Thai Ministry of Finance, the four firms were given the mandate to operate in January 2019. Additionally, crypto linked services were authorized to Coins TH Co., Ltd, a brokerage firm, as well as exchanges, such as Satang Corporation, Bitkub Online Co, and Bitcoin Exchange Co.

The Thai regulator has also stipulated that it is seeking collaboration from relevant foreign players so that the crypto industry in Thailand can be considerably scrutinized because foreign-aided scams have been inevitable.

Across the globe, crypto scams have been wreaking havoc. For instance, in Saudi Arabia, the ministry of finance recently aired its concerns about cryptocurrency scammers who were utilizing its symbols proclaiming to offer tokens that are government-related.

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Thailand Finance Ministry Eyes Blockchain Technology to Revamp Service Delivery

Uttama Savanayana, Thailand’s Finance Minister, has stipulated that his ministry intends to use blockchain technology in upgrading the system infrastructure. The decision comes from the knowledge that blockchain technology will ensure optimal service delivery to the nation’s citizens.

Uttama views blockchain as part of the technological innovations that will maximize efficiency and productivity in the modern age. Therefore he believes that the blockchain project will be instrumental in strengthening Thailand’s economy, as well as enhancing the quality of life among the citizens.

The minister also acknowledged that the Memorandum of Understanding (MoU) needed when utilizing the blockchain technology would be signed by nine departments under Krungthai Bank and the Ministry of Finance.

Uttama seeks to make infrastructural changes in the ministry as he has asserted that he does not have any intentions of interfering with the country’s central bank monetary policy choices.

Thailand joins other nations across the globe that seeks to change their systems through blockchain. For instance, the Sierra Leone administration recently announced its objective of altering its national ID infrastructure with blockchain. This project is expected to be completed by the end of 2019, and citizens will be advantaged as they will have more access to credit and financial services. The Sierra Leone government has stipulated that the blockchain project will be pivotal in making its citizenry financially resilient and informed.

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Ten Malaysians Arrested for Unlawful Bitcoin Investment Event

Ten Malaysians have been arrested in Chiang Mai, Thailand, and charged with illegally running a business that encourages Chinese nationals to invest in Bitcoin without a valid license.

According to the Bangkok Post, Pol Lt Gen Sompong Chingduang, the Commissioner of the Immigration Bureau, the unnamed Malaysian nationals were detained after they hosted a Bitcoin investment seminar in one of the city’s hotels. At least 100 Chinese nationals were in attendance.

The ten Malaysians failed to show they were licensed to run a Bitcoin investment platform in Thailand after the police raided the event. The suspects have been charged with unlawfully working in this nation.

Allegedly, the suspects entered into Thailand on tourist visas though they did not have the necessary work permits.

As reported by Blockchain.News on Aug 26, the Thai Securities and Exchange Commission (SEC) unraveled a crypto scam whereby potential investors were coerced into functioning with overseas companies.

The Thai regulator stated that it was aware of various illegitimate companies taking part in the purported scam identified as an FX trading corporation.

On the other hand, Uttama Savanayana, Thailand’s Finance Minister, acknowledged that his ministry intends to use blockchain technology in upgrading the system infrastructure. The decision comes from the knowledge that blockchain technology will ensure optimal service delivery to the nation’s citizens.

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Thailand’s Trade Policy Office to Trace Agricultural Products from Farm to Export Using Blockchain

Thailand’s Trade Policy and Strategy Office (TPSO) has revealed its intentions of using blockchain technology to trace agricultural products from farms to export as this will optimize buyers’ confidence.

The traceability of organic rice will be tested initially, and other agricultural products will follow suit.

The blockchain system to be deployed will trail the process from cultivation, whereby a camera will be installed in the rice fields to authentic whether it is real organic rice.

Pimchanok Vonkorpon, TPSO’s director-general, noted that the project will kick off as soon as the office gets the operating funds based on the fiscal 2020 budget. TPSO will also propel discussions with blockchain experts, financial institutions, and related authorities to hasten the development of the blockchain system.

Vonkorpon asserted: “We already talked with farmers and some 5,000 growers from Surin province will participate in this project,” she said. “We expect that the project will start in the middle of the next year, and if successful, we will extend it to other agricultural products.”

She also added: “This system will help instill confidence in Thai organic rice, reducing problems of buyer’s rejection, product adulteration, and license subrogation in order to increase the bargaining power and add more value to the product, as well as creating opportunities for expanding export markets.”

The blockchain network will enable buyers to check the source of organic rice, and this will boost their satisfaction and trust levels.

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Thailand’s SEC to Eradicate Any Stumbling Blocks to Digital Asset Advancement

Asian nations are gearing towards incorporating digital assets into their economies as the world gets ready for the fourth industrial revolution or 4IR touted to be transformative. For instance, it is speculated that China is setting a precedent in blockchain adoption.

Thailand is also not wasting any time because it intends to open up the digital asset sector by amending the present regulations.

According to the Bangkok Post, the Securities and Exchange Commission (SEC) in Thailand has revealed plans to revise the royal decree on digital asset businesses in 2020 to boost digital assets’ growth, as well as shield investors from avoidable risks.

The secretary-general of the SEC, Ruenvadee Suwanmongkol, acknowledged that it would scrutinize whether the royal decree has any stumbling blocks to digital asset businesses.

She acknowledged: “Laws should not be outdated and should serve market needs, especially for new digital asset products, and be competitive with the global market. We need to explore any possible obstacles.”

The royal decree was effected in May 2018, and it listed four secondary business intermediaries, namely brokerage firms, dealers, crypto exchanges, and token portal service providers or ICO portals.

As specified by the SEC, the royal decree caters for digital tokens, cryptocurrencies, and any other electronic data unit.

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Thailand Immigration Services to Implement the Idea of Virtual Visas

Distributed ledger technology will now integrate its way into features of the Thai Immigration Services such as the ‘Visa on Arrival.’ The system is expected to launch very soon and will help approximately 5 million visitors to visit Thailand without extensive procedures. The utilization of blockchain technology will allow the system to speed up the application process and protect the confidential information of the tourists. The collaboration of the project is between Gateway services and Australian company, ShareRing.

The expectation from the Thai officials is that the ‘eVOA’ system will benefit tourists from India and China during the early stages of their visa application process. Moreover, it is an ever-increasing trend to transfer from paper-based systems to online methods. Travelers coming into Thailand will no longer need to bring physical documentation to ports of entry, for example, flight tickets, hotel bookings, and identity proof.

At present, the initial testing period is unclear; however, the success of the ‘eVOA’ may encourage accommodating more foreign entries into Thailand and adopting the system in other countries.

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Toyota Leasing Issues Debentures Using Blockchain in its $16 Million Thai Market

Toyota Leasing Thailand Co Ltd, the automotive leasing arm of Toyota Motor Thailand, has offered debentures through blockchain’s distributed ledger technology (DLT) based on the Securities and Exchange Commission’s regulatory sandbox.

As reported by Bangkok Post on Jan. 16, DLT was deployed because it enables debenture issuers to view the real-time transactions of debenture holders.

Toyota Leasing Thailand’s debenture value is approximated to be 500 million Baht, around $16.4M USD. Debentures are only offered to institutional and high-net-worth investors in this nation with a maturity period of between 29 days and 11 months.

So what is a debenture?

A debenture is a debt instrument that is given without collateral, an asset that a lender accepts as security for extending a loan. Since no collateral backing exists, a debenture is usually dependent on the reputation and creditworthiness of the issuer for support. Debentures often function like bonds as they yield periodic interest payments referred to as coupon payments. Moreover, they are usually issued by governments and corporations to raise funds or capital.

Gathering bondholders’ information

Presently, the Thai Bond Market Association (TBMA) has attained trading information and details on bond features. Nevertheless, it still lacks the bondholder’s data, blockchain will be instrumental in eradicating this challenge as it will aid in collecting more information from bondholders.

TBMA has been studying blockchain technology since July 2018 as it felt that it would transform bond registrar services for corporate bonds.

In this project, Bank of Ayudhya is the debenture holder representative, whereas Bangkok Bank the debenture underwriter.

By leveraging on blockchain technology, Toyota Leasing Thailand seeks to get real-time information of debenture holders via the registrar as debentures are usually offered based on their reputation and creditworthiness.

These are sentiments aired by the company’s managing officer, Chuenkamol Boobphakam, who believes that DLT will propel transaction efficiency, as well as simplifying the complicated issuance process witnessed in the primary debenture market.

Hong Kong’s Central Bank and Bank of Thailand Announce Results of Blockchain-Based CBDC Study

The Hong Kong Monetary Authority (HKMA) and the Bank of Thailand published the results in a research report of the Project Inthanon-LionRock, by the two central banks on the application of distributed ledger technology and central bank digital currencies (CBDCs) on cross-border payments. In May 2019, the two authorities signed a Memorandum of Understanding (MoU) on fintech collaboration, as Thailand is one of Hong Kong’s top 10 principal trading partners.

Project LionRock, native to Hong Kong’s central bank, started in 2017, along with three note-issuing banks, R3 consortium and Hong Kong Interbank Clearing Limited, and proof-of-concept (PoC) was developed. Currently, the banks that are involved in the project are the Hong Kong Shanghai Banking Corporation Limited, and ZA Bank, a virtual bank that is licensed by the HKMA, and formerly known as ZhongAn.

Project Inthanon started in 2018 and has arrived at its third phase. The two projects are exploring how distributed ledger technology and blockchain could be used for cross-border funds transfers. The two authorities have agreed to continue to further research in relevant areas, including the involvement of other banks and relevant parties in facilitating cross-border fund transfer trials. In the third quarter of 2019, eight banks in Thailand joined the central bank to develop the cross-border funds PoC.

Not made for retail

One of the key findings from the study concluded that due to the highly efficient and trusted retail and wholesale payment infrastructures in Hong Kong, there is not an urgent need for a CBDC at both the retail and wholesale levels. Although there is little value in developing a CBDC for retail payments, the study found that there has been an increase of interest in cross-border payments in funding solutions. The two authorities hope the study will help both jurisdictions in terms of trade.

Comparing to China’s CBDC

As China has been reportedly ready to launch its own CBDC, used mainly as digital cash issued by the central bank, the HKMA believes that there would not be an area for partnership, as China’s CBDC is primarily focused on the retail market. Although China also has other methods of payment, including Alipay and WeChat Pay, Pou explained that Hong Kong still does not have a need for a retail CBDC.

Solving the current pain points of the existing cross-border funds model

The study also aimed to solve the current pain points of the existing cross-border funds transfer model, such as the inefficiencies in settlement time, high fees involved in currency exchange, and the involvement of extensive intermediaries. The development of CBDC in both jurisdictions will allow for a seamless experience with cross-border remittances, with the access of competitive foreign exchange pricing, liquidity management, and saving mechanisms, and improving the transparency of transactions to fulfill regulatory requirements.

Mathee Supapongse, the Deputy Governor of the Bank of Thailand said, “Building on pain points and business cases, the novel cross-border model is designed and developed as a PoC.”

By utilizing blockchain, liquidity management and saving mechanisms could be automated, smoothening the payment process, including transaction queuing and conversion. Cross-border funds transfers could be completed in real-time, with fewer intermediaries involved and settlement layers. So far, only a Thai Baht to Hong Kong Dollar corridor has been tested with the 10 participating banks from Thailand and Hong Kong, the model is designed to be scalable and could be used with other jurisdictions as well.

Edmond Lau, the Senior Executive Director of the HKMA added, “Our joint research project with the Bank of Thailand marks an important first step to solve the pain points of low efficiency and high costs in traditional cross-border payments. With the use of blockchain technology, the innovative and unique solution not only addresses different technical issues in practical applications, but also offers good references to the central banking community on the use of CBDC.”

Practical solution and assessing hurdles

“What makes our study different is that we actually offer practical solutions to address the most well-known pain points in cross-border remittances […], not just theoretical or technological; so we hope we can offer some useful references to the central banking community,” said Colin Pou, the Executive Director of Financial Infrastructure of the HKMA.

According to Pou, the corridor network is meant to be a “trusted platform” for remittances, a platform that users can count on since it was created by central banks.

The next areas of focus of the study was said to be more extensive research on the technical, legal, and governance requirements of the CBDC. However, the HKMA representatives did not give a specific time for the potential launch, as other hurdles need to be assessed before setting a time for the launch.

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Bank of Thailand Projected to Go Forward with Central Bank Digital Currency Prototype

The Bank of Thailand (BOT) announced its plans for a Central Bank Digital Currency (CBDC) prototype to be in effect by 2021. The BOT asserts that with a digital payment system in place, this would make transactions more efficient and secure. The BOT plans to begin the production of their prototype for a CBDC next month.

After having successfully launched Project Inthanon-LionRock with the Hong Kong Monetary Authority (HKMA) in January 2020, the BOT has expanded their financial ambitions by developing a CBDC for businesses. This would enable businesses to conduct fund transfers faster and with higher efficiency, whether it be for domestic or cross-border trade purposes.

In light of the digital age, CBDC is a financial innovation that may revolutionize how corporate firms conduct business. As Senior Executive Director of the HKMA Edmond Lau stated, “With the use of blockchain technology, the innovative and unique solution not only addresses different technical issues in practical applications but also offers good references to the central banking community on the use of Central Bank Digital Currency.”

Project Inthanon-LionRock was a proof-of-concept (PoC) prototype finalized in January 2020 that studied the effectiveness of CBDC for cross border payments. The project was divided into three phases. The first part outlined the development of a proof of concept using CBDC and the benefits of employing a distributed ledger technology. The second part pertained to the efficiency of blockchain vs. a more traditional centralized system; the third phase explored the plausibility and interoperability of cross border funds transfer, and whether CBDC could potentially revolutionize foreign exchange.

In a digital age that is quickly evolving, multiple countries are racing to produce their own CBDC. China has expressed its intent on normalizing blockchain technology usage with the Password Law they put forward at the beginning of the year.

Many also hope to see an end to money laundering and fraud with the implementations that come with blockchain technology. As Chairman of the FinTech Association of Hong Kong Henry Arslanian observed, “one of the potential ideological goals of moving to CBDCs is that we may have a fighting chance to try to put an end to not only corruption, but also potentially money laundering, and that can be really positive for society as a whole.”

Bank of Thailand Tests its Central Bank Digital Currency with Large Businesses Before Official Debut

The Bank of Thailand (BoT), Thai’s central bank, is already utilizing its central bank digital currency (CBDC) for financial transactions with various big businesses.

As reported by a local news outlet on July 16, this development ushers in the third development phase of the nation’s CBDC before a public debut.

Hong Kong Monetary Authority Involvement

According to the announcement, The Bank of Thailand intends to carry out transactions using the CBDC with the Hong Kong Monetary Authority come September.

BOT assistant governor, Vachira Arromdee, noted:

“The central bank is also thinking about expanding use of the cryptocurrency to the general public, but a comprehensive study must be completed before taking such action.”

She added the digital currency’s emergence could eliminate the urge for intermediaries when undertaking financial transactions; hence, driving the cost down. Arrmodee cited China by stipulating that the digital currency’s public usage as tokens had not compromised its financial system.

Volatility addressed

The BOT views the usage of its CBDC as a step forward because it will be backed by real assets like the nation’s international reserve. As a result, this digital currency will be stable as compared to Bitcoin.

A public rollout is being supported by Thakorn Piyapan, the head of the Krungsri Consumer Group, as he believes it will propel e-wallets and mobile banking. Additionally, it will slash the cost of using and printing banknotes.

Nevertheless, Arrmodee stipulated that the central bank was delving deeper into the public usage of the CBDC through e-wallets by weighing the pros and cons. For instance, the impact it has on the nation’s financial stability.

CBDC seems to be ripe for adoption as various countries are gearing towards this digital asset. For example, Japan recently revealed its intention to include it in the formal economic plan to boost international coordination and transactions.