In a strategic move to position itself as a leading cryptocurrency hub, Thailand has unveiled a tax reform that exempts crypto trading from the value-added tax (VAT). This policy, effective from January 1, 2024, signifies the country’s commitment to fostering a robust digital economy.

The Bangkok Post reports that the Finance Ministry of Thailand is taking significant steps to bolster the nation’s status as a crypto-friendly destination. Paopoom Rojanasakul, the secretary to the finance minister, has expressed the ministry’s aim to cultivate the cryptocurrency market as an attractive option for fundraising.

The VAT exemption marks a new era for Thailand’s crypto landscape. By lifting the 7% VAT on crypto trading income, the government is opening doors for brokers and dealers regulated by the Securities and Exchange Commission (SEC) of Thailand to operate with greater financial freedom. Additionally, there are discussions to revise the 2019 Securities and Exchange Act to ensure digital investment tokens are in harmony with existing securities.

Following this tax reform, Kasikornbank Pcl, Thailand’s second-largest bank, is making headlines with its initiative to create a digital-asset ecosystem. As reported by crypto.news, the bank is actively encouraging certain clients to consider token issuance as a method of capital fundraising.

Despite the progressive steps taken by the Thai government and financial institutions, the memory of the 2017 crypto boom and bust continues to instill caution among investors. Bloomberg notes that the number of active crypto trading accounts in Thailand has seen a decline from the 2021 peak of 700,000 to around 116,000 as of November.

Thailand’s latest tax exemption for crypto trading is a clear indicator of its aspirations to become a global crypto hub. With regulatory advancements and banking sector involvement, the nation is charting a course towards a more inclusive and robust digital economy. However, the true impact of these changes on the market and investor confidence remains to be seen.