Does Paetongtarn Shinawatra’s ascent to power mark the dawn of a crypto-friendly Thailand, or is her silence on the issue a sign of caution?

Who is the New Thailand PM, and Why Does it Matter?

Thailand has made history by electing its youngest Prime Minister ever — Paetongtarn Shinawatra, a 37-year-old political newcomer from one of the nation’s most influential and controversial families.

Paetongtarn is the daughter of Thaksin Shinawatra, a former Prime Minister whose tenure from 2001 to 2006 was marked by rapid economic growth as well as deep political division. Thaksin’s policies earned him both devoted supporters and fierce critics, eventually leading to his removal from office in a military coup in 2006 and his subsequent exile in 2008.

After 15 years away, Thaksin made a highly publicized return to Thailand last year, sparking speculation about his continued influence on Thai politics. The Shinawatra legacy doesn’t end there. Paetongtarn’s aunt, Yingluck Shinawatra, also served as Prime Minister from 2011 to 2014 before being ousted in yet another coup and going into exile.

Now, with Paetongtarn assuming the role, she becomes the third member of her family to hold Thailand’s top political office, citing the lasting influence of the Shinawatras in Thai politics.

Paetongtarn’s rise to power followed the removal of her predecessor, Srettha Thavisin, by Thailand’s Constitutional Court. Srettha was found guilty of an ethical breach related to appointing a Cabinet minister who had previously been jailed for attempting to bribe a judge.

Will Paetongtarn Follow in Her Father’s Crypto Footsteps?

There’s a lot of speculation that Paetongtarn might steer Thailand toward becoming a crypto-friendly country. Her father, Thaksin, is known for being pro-crypto, especially Bitcoin, and many believe his influence could push Thailand toward embracing crypto.

Paetongtarn Shinawatra has officially become Thailand’s youngest prime minister. She is a crypto bull. Her father was a crypto bull. IMO: Thailand could be next to adopt crypto as legal tender. Let’s watch it play out.

However, despite these speculations, Paetongtarn has remained conspicuously silent on her stance regarding crypto since taking office.

Paetongtarn has promised to make Thailand a place where people can “dare to dream, create, and shape their own future.” But what does this vision mean for the future of crypto in Thailand?

Thailand’s Strides Toward Crypto Integration

Thailand has been making moves toward integrating crypto into its financial system. One of the most notable steps is the launch of the Digital Asset Regulatory Sandbox. Launched on Aug. 9, the sandbox is designed to facilitate experiments and the development of innovations supporting the efficient provision of digital asset services in a real-life context, according to the Thai SEC.

In simple terms, it allows participants to test various crypto-related services under flexible rules, encouraging new ideas while ensuring these services are developed in a safe environment. The sandbox focuses on six main areas: exchanges, brokers, dealers, fund managers, advisors, and custodial wallet providers.

To take part, companies need to show they have solid qualifications, like enough capital and strong management systems, ensuring that only those with a firm foundation can experiment with these new technologies.

Over the past few years, Thailand has slowly rolled out measures to support the growth of its crypto market. For example, in March 2024, the Thai cabinet approved a tax exemption on crypto earnings from investment tokens, aiming to boost the country’s digital finance competitiveness. This was soon followed by the SEC’s approval of Thailand’s first spot Bitcoin ETF, further showing the nation’s commitment to supporting digital assets.

However, not all of Thailand’s recent digital plans have been welcomed with open arms. The government’s Digital Wallet program, announced in April, has sparked widespread debate. The program aims to provide 10,000 baht (about $275) to 50 million citizens, distributed as digital money to be spent at local businesses.

While this idea was a major campaign promise of the ruling Pheu Thai party, it has been criticized for being too restrictive. To qualify for the program, citizens must meet specific criteria, such as being over 16 years old, earning less than 840,000 baht ($23,710) annually, and having savings under 500,000 baht ($14,072). Even then, the digital money can only be spent on select necessities at local small businesses and must be used through an official government mobile app.

Some analysts argue that the program has the features of a central bank digital currency (CBDC), even though the government insists it is not run by the central bank. The rules on how the money can be spent and the need to use the official app suggest that this initiative might work much like a CBDC, just without the label.

Will Paetongtarn Keep Thailand on the Crypto-Friendly Path?

Paetongtarn’s predecessor, Thavisin, was known for embracing digital assets, leading many to wonder if Paetongtarn would follow in his footsteps or introduce her own approach.

Paetongtarn’s father, former Prime Minister Thaksin Shinawatra, was optimistic about cryptocurrencies. With her leadership, there’s a strong possibility she will continue Shinawatra’s legacy of innovative financial policies.

Thailand has already made progress in creating a welcoming environment for crypto investors and entrepreneurs. The proactive stance of the Thai SEC has been key in this, establishing a robust legal framework that has attracted numerous blockchain companies to the country. Given her family’s history and the existing framework, it’s highly probable that Paetongtarn will continue to push Thailand forward in the digital asset space.

Adding another layer of complexity is the controversial digital wallet handout program. Paetongtarn affirmed the significance of this initiative, stating, “The digital wallet scheme is a project we intend to use as a major economic stimulus,” suggesting that, despite its critics, the program may still play a central role in her government’s economic strategy.

For now, all eyes are on Paetongtarn as she steps into this critical role. With her background and the strong foundation laid by her predecessors, the odds seem to favor a pro-crypto future for Thailand. However, as with any new leadership, the potential for surprises remains, keeping the global crypto community on alert for what comes next.

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