Groundbreaking development: cryptocurrency token endorsed by the government hits the market!
Thailand Prepares to pioneer Public Borrowing with Digital Tokens, Subject to Significant Restrictions
The Securities and Exchange Commission (SEC) of Thailand has concluded regulations for the introduction of a state-backed digital asset called G-Token. This initiative marks Thailand’s ambitious goal of becoming the first country to employ digital assets in public borrowing.
According to a report by the Bangkok Post on May 27, one of the initial rules set by the SEC prohibits the use of the token as a medium of exchange and adds that G-Token cannot be traded like conventional cryptocurrencies.
Cryptocurrency transactions remain popular in Thailand, although the central bank had banned its use for payments in 2022.
Debut of G-Token
G-Token was introduced on May 13 as part of an innovative strategy to raise funds for public projects through digital tokens. This represents an alternative approach to cover the country’s budget deficit.
The Ministry of Finance is planning to issue a total of 5 billion Thai Baht ($150 million) worth of G-Tokens through an Initial Coin Offering (ICO) on July 25. The registration process will be handled by the Ministry of Finance, and interested investors will be provided with information regarding interest rates, maturity, and collateral before the launch.
G-Tokens will only be accessible to licensed digital exchanges or authorized intermediaries for buying purposes, and they can only be stored in digital wallets.
Regulatory Framework
SEC Deputy Secretary-General Jomkwan Kongsakul stated, "G-Token is not a debt instrument like government bonds or shares. Therefore, it will be evaluated under the Digital Asset Act instead of traditional public debt laws."
To ensure investor protection and prevent market manipulation, the SEC has established strict measures, with token transfers confined to designated platforms, and prohibiting them from moving outside these platforms through smart contracts.
SEC Secretary-General Pornanong Budsaratragoon emphasized, "We envision G-Token to be used as a technology-focused investment tool, not for speculative purposes."
Cryptocurrency Landscape in Thailand
In recent times, major exchanges such as Binance, Upbit, and KuCoin have started operations in Thailand, with Bitkub leading the market, handling daily trading volumes of around $44.5 million. The Thai market features the USDT/THB pair as its most popular trading pair.
Only Thai nationals are permitted to open accounts on cryptocurrency exchanges within the country, prompting efforts to establish Thailand as a digital hub and cryptocurrency center, given the large number of foreigners residing there.
Although the Thai government has announced plans to launch a pilot crypto payment system for foreigners in Phuket, no concrete progress has been made on this matter over the past six months.
A similar attempt to promote Thailand's status as a crypto center involves an exclusive offer from Binance offering a $600 gift to new sign-ups [Detailed information available through the provided link].
Investors who are interested in investing in G-Tokens, Thailand's state-backed digital asset, will have to register through the Ministry of Finance, as part of an Initial Coin Offering (ICO) on July 25. The SEC, in its aggressive regulatory approach, has ensured that G-Tokens will be evaluated under the Digital Asset Act and not traditional public debt laws, with strict measures put in place such as token transfers confined to designated platforms and prohibiting them from moving outside these platforms.
In the growing cryptocurrency landscape of Thailand, G-Tokens will represent a technology-focused investment tool, created as an alternative approach to fund public projects and cover the country’s budget deficit, different from the speculative nature of conventional cryptocurrencies.
