Robust regulations and oversight are key to crypto’s future, fintech expert says
Thailand has the strength and potential to be Southeast Asia’s digital asset hub due to the country's impressive progress in implementing and regulating digital currency, said Danny Levy, managing director for Asia, Australia, and New Zealand of Money20/20, the world's largest fintech-event organiser.
He made the comment during an exclusive interview with The Nation earlier this month, amid a worldwide push for robust global regulatory policies and oversight of digital currencies.
The recent crypto downturn – amidst scandals over crypto firms' lack of transparency, fraud, and mismanagement of customer funds – is leading to a tightening of regulations in the digital assets landscape around the world to protect investors and monetary systems, including mitigating the risks posed by cryptocurrency and digital tokens.
The Asian region's crypto outlook is one of the most promising as regulatory efforts are underway and legal precedents are set, creating a favourable environment for crypto players to thrive, Levy said, adding that the region's proactive approach to regulation and collaboration strengthens the prospects for crypto-currency advancement in Asian fintech.
Thailand, he noted, is standing alongside Japan, Hong Kong, and Singapore as Asia's leading countries in taking proactive steps to regulate cryptocurrencies and provide clarity in crypto policies.
"In Thailand, the digital assets industry witnessed significant growth from 2021 to 2022, as numerous established financial industry players and startups ventured into the digital-assets market," he said.
Meanwhile, the Securities and Exchange Commission has demonstrated its commitment to market integrity by holding public hearings, introducing supplementary regulations, and strictly enforcing rules by penalising non-compliant operators.
Interest in blockchain technology is also rising in Thailand, with the number of blockchain and cryptocurrency traders reaching over 3 million.
"Thailand now ranks 12th globally in digital-asset acceptance and has the potential to become a regional hub for blockchain technology in Asean," Levy said.
Despite the recent crypto winter dampening industry spirits, he said, the move to strengthen digital currency regulations demonstrates the currency’s significant role in the future of the financial sector.
"It's impossible to predict what will happen to the crypto-currency market in 2023 and beyond [but] the clarity provided by digital-asset regulations … provides a roadmap for both traditional financial institutions and crypto-native firms, which is critical for traditional financial institutions. These guidelines pave the way for new digital-asset offerings and crypto-native firms," Levy said.
Regulatory clarity may necessitate a rapid expansion of their regulatory expertise and compliance oversight in order to meet the regulatory requirements of global financial services. As a result, confidence in the crypto space may appear to be in flux.
However, the application of these clear regulations, combined with firms improving their risk-management practices, could serve as a solid foundation for rebuilding trust.
Furthermore, Levy highlighted Thailand's clear potential as a leading Asean finance and fintech hub, owing to its high digital and mobile penetration rates and young population.
The government is actively driving fintech development through various initiatives, and the Bank of Thailand has been proactive in creating regulatory sandboxes to test new technologies and collaborate with regional regulators. This enables them to identify trends, risks, and opportunities.
"To keep up with global fintech trends, Thailand should actively engage with the global fintech community, participate in international forums, and collaborate with other fintech hubs.
Cross-border partnerships with regulators, governments, and the private sectors can provide valuable insights into cutting-edge technologies and trends," Levy said, adding that Thailand should prioritise risk management and robust consumer protection measures to prevent fraud and cyber-attacks to ensure success and sustainability in fintech.
He said these issues would be discussed at Money20/20 Asia, which will be held for the first time in Bangkok next year. The event will take place at the Queen Sirikit National Convention Centre from April 23 to 25 next year.
