Former Premier’s Proposal Stirs Debate Over Cryptocurrency’s Role in Thailand’s Economy
Bitcoin has once again become a focal point in Thailand’s financial discourse, following a proposal from former Premier Thaksin Shinawatra advocating for the adoption of cryptocurrency in the country. Speaking at a recent seminar hosted by the Pheu Thai Party, Thaksin suggested that Thailand could take a bold step by integrating Bitcoin into its economy through a controlled pilot project in Phuket, aiming to encourage digital currency holders to spend their Bitcoin within the country. His remarks come at a time when Bitcoin has experienced a significant surge in value, reaching an all-time high of US$106,000 following Donald Trump’s victory in the 2024 US presidential election.
The proposal, however, has sparked a heated debate among policymakers, economists, and industry experts, with concerns about the potential risks and complications of introducing digital currencies into Thailand’s financial system.
Concerns Over Volatility and Economic Impact
One of the primary concerns voiced by the Thailand Development Research Institute (TDRI) is the inherent volatility of digital currencies like Bitcoin. The TDRI cautioned that while a pilot project might seem appealing, it could falter if Bitcoin’s value fluctuates dramatically. Moreover, the idea of introducing a government-backed cryptocurrency, such as a stablecoin tied to government bonds, has raised alarm over its potential to destabilize the baht, Thailand’s official currency.
“There is a real risk that introducing such digital assets could create confusion in the economy,” said a representative from the TDRI. “A new digital currency could compete with the baht, undermining confidence in the country’s financial system.”
Investment strategists have also expressed skepticism, with some warning that Bitcoin could disrupt the stability of the baht and Thailand’s overall economic framework. They argue that the country should wait to see the outcomes of similar experiments in other leading economies before committing to such a move.
The Role of a Central Bank Digital Currency (CBDC)
Experts like Thanathat Srisawast, a strategist at the Tisco Economic Strategy Unit, have suggested that a more cautious approach would involve creating a Central Bank Digital Currency (CBDC) — a digital currency that would be regulated and backed by the government. “If Bitcoin were to be used for payments, the process must be simple and secure,” said Thanathat. “But first, we need to ensure that the digital currency infrastructure is in place.”
Thanathat further emphasized that Thailand could benefit from studying the experiences of other countries, like El Salvador, which has embraced Bitcoin as a legal tender. However, he warned that any hasty decisions could damage the credibility of both the government and the Bank of Thailand.
Challenges in Phuket and the Broader Business Sector
Phuket has been proposed as a test site for Bitcoin transactions, where tourists could use their cryptocurrency to pay for goods and services. However, Thanet Tantipiriyakit, president of the Phuket Tourist Association, pointed out that there has been little demand from foreign tourists to use Bitcoin in place of traditional currency.
“The existing financial system works smoothly for foreign tourists, and we haven’t seen a significant push for cryptocurrency adoption,” Thanet stated. “The business sector is more concerned about the grey areas surrounding digital currencies, such as their potential misuse for fraudulent activities.”
In addition, the Phuket tourism sector has voiced concerns about the lack of infrastructure to support cryptocurrency transactions, such as partnerships with global tech companies to facilitate payments. There is also a fear that Bitcoin’s growing popularity could exacerbate ongoing issues with unregistered online travel agents, causing revenue to flow out of Thailand.
A Divided Stance on Bitcoin’s Future
While some in the business community remain open to the idea of Bitcoin as an investment vehicle, others are more cautious. Montri Mahaplerkpong, chairman of the International Chamber of Commerce, raised concerns about Bitcoin’s lack of backing, likening it to a speculative asset rather than a stable currency. “Bitcoin is not backed by anything,” Montri stated. “If the trading system collapses, users will be left to bear the consequences.”
Montri, while acknowledging the potential of cryptocurrency, believes its use should be limited to individual investors rather than as an official medium of exchange. “The government should not promote cryptocurrency in a way that could cause economic harm,” he warned.
As Thailand grapples with the idea of integrating digital currencies into its economy, the debate surrounding Bitcoin’s potential role will continue to unfold, with experts, policymakers, and industry leaders urging caution as they assess the broader implications for the country’s financial stability.
