Thailand currently leads the world in the proportion of internet users that hold cryptocurrencies at 20.1%. Cryptocurrencies are the most well-known use of blockchain technology and there are considerably more uses. The BOI have recognized the potential impact this pivotal technology could have in future proofing Thailand.
What is the blockchain and its evolution
The blockchain is an immutable distributed ledger that uses cryptographic techniques to record transactions. Bitcoin was the first cryptocurrency created in 2009 and sparked the creation of an entire global industry. The use of the blockchain in finance is the most obvious use with many larger organizations in Thailand taking note of the wide-scale adoption by the Thai population of digital currencies by including the acceptance of cryptocurrencies for goods and services. Considering its immutability and speed, cross-border transactions take away the requirement for intermediary banks and processing could be done in real-time, 24 hours a day. It has also been calculated that the financial industry could potentially reduce financial services infrastructure costs by up to US$20 billion per year by 2022.
Globally, governments have taken a very wide range of actions with regards to the use of cryptocurrencies and Thailand has taken the stance of regulation rather than banning, becoming one of the first countries to draft rules on digital assets custody. Thailand’s central bank is also testing a central bank digital currency.
Blockchain technology could also be used to monitor supply chains, for digital IDs, for copyright protection, for the Internet of Things (IoT), and even real estate and land title transfers.
Figure. Blockchain Applications.
In one of our previous articles (2020), we have illustrated how trade finance can be reshaped by blockchain. In 2021, we expanded on the solutions Blockchain can offer for supply chain sustainability, and its applications in Thai export sectors.
BOI and Blockchain
The BOI is currently conducting an in-depth assessment of blockchain technology to ensure Thailand’s preparedness for a blockchain future through education and awareness, eventually planning for targeting incentives to attract foreign investors. This could boost Thailand’s IT infrastructure and IT services in line with global standards.
Firms can make use of CIT exemptions of up to 8 years through category 5.10 Development of Software, Digital Platform or Digital Content should they wish to add blockchain technology into their systems.