The Government of Thailand, by royal degree, uses fines and threats of jail time, to restrict cryptocurrency usage.
The royal degree classifies cryptocurrencies as digital assets and thus under the control of the country’s Security Exchange Commission. Previously, the central bank of Thailand had directed financial institutions to steer clear of cryptocurrencies. The new law will levy a fine of two times a token’s value, up to a maximum of 500,000 baht ($20,930 USD), for unregistered token brokers or exchanges.
Those that intend to use cryptocurrencies for tax avoidance face possible jail time. Fraudulent tax filings could garner a five year jail sentence, while those that conduct unauthorized cryptocurrency business could face two to five years in jail. They would also face fines up to 10,000 baht ($314 USD) for each day of business operations. Then those that simply allow others to use their accounts involving cryptocurrency face up to one year in jail and fines up to 100,000 baht ($3,000 USD). The law also levies a 15% tax on cryptocurrency transactions. Some in Thailand, like Thanyalak Vacharachaisurapol, assistant managing director of Kasikorn Research Center, hopes that the new law will “provide long-term stability to the market”.
The cost of excessive punishments
This new law in Thailand utilizes the most valuable resources of governments: monopoly power on force and the ability to lock individuals in cages. Thailand had been considering legalizing cryptocurrencies as a digital asset for a few months, but the final law demonstrates the government’s desire to control consumers’ choices. The law stops short of a straight ban, which is a positive for cryptocurrency adoption, but it also prevents many cryptocurrency transactions and ICOs that would have otherwise been voluntarily conducted between two or more parties. It also will raise the costs of cryptocurrency businesses and/or force crypto businesses to leave the country since it will require government registration and compliance, which raises costs much like the New York bitlicense did in the United States.
The threat of jail time also brings back memories of the Silk Road prosecution where United States law enforcement went after Ross Ulbricht to the full extent of the law to make an example of him by shoving him in jail for life. Silk Road was made famous for the use of Bitcoin to facilitate illegal online drug transactions that were otherwise voluntary. The harsh sentencing demonstrates governments’ maligned incentives to persecute, as well as prosecute, those that threaten their worldview, which now involves cryptocurrencies that challenge government fiat. The whole process of excessive prosecution costs citizens hundreds of billions each year and, now that cryptocurrencies are involved, could exacerbate those costs and slow the development of the revolutionary new technology.
Dash is legally helping individuals
Dash has demonstrated, contrary to government belief, that illicit activities are only an insignificant fraction of its overall transactions. Transactions are conducted by individuals acting voluntarily, which by economic law, means that both parties are becoming better off. Dash is also helping individuals around the world with banking inclusiveness and inflation avoidance; problems that governments having been trying to solve for decades.
Dash is actively working to expand throughout Southeast Asia benefiting consumers. Dash does not presently have a huge presence in Thailand, which will limit the downside risk for Dash during the Thailand crackdown. Unfortunately, it will be the consumers in Thailand that will suffer the brunt of the government’s crackdown, as they will have harder and more expensive access to blockchain technology and innovation. However, Dash with its unique governance and treasury structure is one of the best positioned cryptocurrencies to coordinate outreach programs. Thus, Dash community entrepreneurs will be well positioned to find ways to work within Thailand’s laws so long as consumers in the country desire Dash.
