Arkhom urges overhaul of crypto laws

Finance minister pushes for inclusion of central bank in digital asset investment supervision

The law governing investments in digital assets should be reviewed to address grey areas, says Finance Minister Arkhom Termpittayapaisith.

He made the remark at a forum on capital market development hosted by the Securities and Exchange Commission (SEC) on Friday.

Mr Arkhom said assets such as digital coins are new to the capital markets. The Finance Ministry has closely consulted with related authorities, including the Bank of Thailand, on the supervision of digital asset investments.

However, there are some grey areas the authorities have yet to clarify, including which agencies supervise certain investments, he said.

Mr Arkhom said authorities are working to prevent fraud in digital asset investments.

He said if fraud occurs, the police should be the first authority to step in, with the case proceeding according to criminal law.

The capital markets continue to play an important role as a key fundraising source in Thailand, as the country still requires huge funding for infrastructure investment, said Mr Arkhom.

He said the latest capital market development plan, which is slated for submission for cabinet consideration, also contains a digital asset development plan.

Speaking at the same event, several former heads of the SEC agreed that digital asset control measures are a major challenge for regulators, specifying that the Bank of Thailand must take part in the supervision.

Former SEC secretary-general Ekamol Kiriwat said regulating digital assets is a challenge for the SEC in the next phase because it requires a new set of rules, while regulations vary in many other countries.

“Thailand has to supervise this through intermediary operators such as trading exchanges, though the supervision in each country is different. Some countries do not accept digital assets for trading, while others place digital assets in the alternative asset market,” said Mr Ekamol.

“In some countries central banks take care of regulation, so this is a major challenge for regulators. But I believe if we have good regulatory rules in place, we can move forward steadily and sustainably.”

Pakorn Malakul, also a former SEC secretary-general, said digital technology would play a greater role in developing Thai capital markets.

“The SEC will have to play more of a facilitation role, allowing more participation from stakeholders,” he said.

“I suggest the SEC put greater efforts into boosting the quality of listed companies and encouraging them to apply more environmental, social and corporate governance principles.”

In addition, the SEC has to increase the number of listed companies in the new economy and give small and medium-sized companies greater access to funding, said Mr Pakorn.

“In the next decade, Thai capital markets will play an increasingly important role in the financial system and the allocation of capital resources to support the sustainable and inclusive growth of the Thai economy,” said Prasarn Trairatvorakul, secretary-general of the SEC from 1999 to 2003.

Former SEC secretary-general Thirachai Phuvanatnaranubala said Thai capital markets should adjust quickly in response to the changing global situation.

As the world has become increasingly divided, trade flows have changed while different currencies are used to complete transactions. Mr Thirachai said there has been a move to reduce reliance on the US dollar for trade, which is the world’s dominant currency.

For example, the Russian ruble has been increasingly exchanged with the Indian rupee. There have been attempts to make local currencies generate higher returns, or possibly use them for borrowing in the future, he said. As a result, the SEC has to find ways to serve and facilitate transactions between such local currencies, said Mr Thirachai.

Trade between regions, and with China, will certainly increase, driving the use of the digital renminbi, he said.

“Thailand has to prepare ourselves to facilitate this kind of flow and allow the use of digital renminbi by Chinese tourists in the future,” Mr Thirachai said.

The digital economy is expected to keep growing because it can help lower transaction costs and provide greater transparency, he said.

The US included the digital economy in its Indo-Pacific Economic Framework and tried to come up with regulations to govern it. This is intended to maintain the major US role in international markets, while hindering the growth of the digital renminbi, said Mr Thirachai.

Thai capital market regulators must figure out a plan to address these issues in the very near future, he said.