Globally, Web3 technology is rapidly advancing and has garnered widespread attention. Governments, businesses, and developers across various countries are actively exploring and promoting the application of Web3. For instance, cryptocurrencies and decentralized finance (DeFi) have become significant innovations in the financial sector, while NFTs (non-fungible tokens) have shown immense potential in the arts and entertainment industries. Web3 not only brings technological innovation but also has profound economic and social impacts, driving the development of the digital economy and transforming the global economic structure.

In Southeast Asia, Thailand stands out as a leader in the Web3 market. Thailand boasts a comprehensive digital asset regulatory system, active market participants, and robust technological and financial infrastructure. These factors position Thailand at the forefront of Web3 technology adoption and innovation in the region. Thailand has shown significant potential and competitiveness, particularly in blockchain applications, cryptocurrency trading, and decentralized finance.

Aiying aims to summarize the current status, challenges, and opportunities of Thailand’s Web3 market through this Tiger Research report, revealing Thailand’s core strengths and development prospects in this emerging field. By studying Thailand’s regulatory environment, market participation, and the specific initiatives of companies and developers, this report helps to understand how Thailand is rising in the Web3 wave and explores its future development paths. Through the interpretation and analysis of this report, we hope to provide valuable references and insights for policymakers, business decision-makers, and industry participants.

1. Thailand Web3 Market

political backgroung

Despite the complex political environment, the Thai government has shown a supportive attitude towards digital assets and blockchain technology. The government’s pro-cryptocurrency policies and support for Web3 technology have created a favorable political environment for the development of the Web3 market in Thailand. For example, the Thai Securities and Exchange Commission (SEC) and the Bank of Thailand (BOT) introduced a series of regulatory measures in 2018 and 2021, respectively, to regulate and promote the development of cryptocurrencies and related businesses. These measures provide legal guarantees and a clear regulatory framework for the application of Web3 technology in Thailand, helping to attract domestic and foreign enterprises and investors.

economic background

Thailand is one of the important economies in Southeast Asia, known as the “New Tiger of Asia.” According to 2023 data, Thailand’s GDP reached $512.2 billion, making it the second-largest economy in Southeast Asia, just behind Indonesia. Thailand’s per capita GDP ranks second among Southeast Asian countries, only after Singapore. However, Thailand also faces some economic challenges, such as political instability, an aging population, and income inequality.

Despite these challenges, Thailand shows great potential in the digital economy field. The Thai government actively promotes digital transformation, hoping to achieve economic growth through the development of Web3 technology and the digital asset market. Especially during the pandemic, the demand for digital economy and online services increased significantly, creating new opportunities for the application of Web3 technology.

2. Regulatory Framework

1、Thailand’s digital asset regulatory system

Thailand’s digital asset regulatory system is one of the most comprehensive and systematic in Southeast Asia. The establishment of its regulatory framework began in 2018 when the Thai government enacted the Emergency Decree on Digital Asset Businesses B.E. 2561. This decree marked an important step for Thailand in the field of digital assets and blockchain technology, making it the first country in Asia to systematically regulate ICOs and other digital asset businesses.

1. Implementation of the 2018 Emergency Act

In May 2018, the Thai government promulgated the Emergency Decree on Digital Asset Businesses B.E. 2561. The decree mainly covers the following aspects:

• Definition and Classification of Digital Assets: Digital assets are classified into two categories: cryptocurrencies and digital tokens. Cryptocurrencies, such as Bitcoin and Ethereum, are defined as “electronic units of information issued based on distributed ledger technology (DLT).” Digital tokens are defined as “virtual assets representing specific rights in blockchain projects.”
• Regulatory Bodies: The Thai Securities and Exchange Commission (SEC) is empowered to regulate the digital asset market, responsible for approving and supervising digital asset exchanges, brokers, dealers, and other related businesses.
• Licensing System: The decree requires all businesses involved in digital assets to obtain licenses from the Thai SEC, including digital asset exchanges, brokers, dealers, ICO issuers, and ICO platforms.

3. License Application Requirements and Their Impact

Exchange License:

Application Requirements:

• Digital asset exchanges must be registered in Thailand, with a minimum capital requirement of 50 million THB (approximately USD 1.35 million).

• Exchanges must ensure the security of customer assets, with over 90% of assets required to be stored in cold wallets.

Operational Standards:

• Exchanges must comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations to ensure transaction transparency and compliance.

Impact:

• This regulatory measure increases market transparency and security, attracting more investors and institutions, thus laying a foundation for the healthy development of Thailand’s digital asset market.

Digital Asset Brokers and Dealers:

Brokers:

• Must be registered in Thailand with a minimum capital requirement of 25 million THB (approximately USD 675,000), and cannot include client orders in their own accounts.

Dealers:

• Minimum capital requirement is 5 million THB (approximately USD 135,000), primarily targeting professional investors.

Impact:

• By clearly defining the responsibilities and requirements of brokers and dealers, the Thai SEC effectively regulates market behavior, preventing market manipulation and other improper activities.

4. ICO Regulatory Measures and Their Impact

ICO Issuance:

Approval Process:

• ICO issuers must undergo preliminary review by an ICO platform and submit a registration statement to the Thai SEC, including a business plan, white paper, use of funds, and financial statements. The SEC has 60 days to review and decide on approval.

Issuing Platform:

• ICOs can only be issued through SEC-approved platforms, ensuring project legitimacy and investor protection.

Investor Protection:

• Retail investors are limited to a maximum investment of 300,000 THB (approximately USD 8,100) per ICO project, with a cap of 30% of the total ICO volume available for general subscription.

ICO Platform:

Application Requirements:

• ICO platforms must be registered in Thailand with a minimum capital requirement of 5 million THB (approximately USD 135,000) and have mechanisms to prevent conflicts of interest.

Responsibilities:

• Conduct project due diligence, technical reviews, AML duties, investor suitability assessments, fund management, and information disclosure supervision.

Impact:

• The establishment of ICO platforms and stringent approval processes increase the transparency and legitimacy of ICO projects, enhancing investor confidence and promoting the steady development of Thailand’s ICO market.

1. Market overview

1、CEX Market: Current Status and Trends of Retail Cryptocurrency Trading in Thailand

Thailand has shown extremely high levels of activity in retail cryptocurrency trading. According to data from 2023, the number of Thai cryptocurrency exchange users reached 2,949,445, while the number of stock market accounts during the same period was only 2,526,530. This phenomenon reflects the Thai public’s strong interest and active participation in cryptocurrencies.

• Bitkub’s Dominance: Bitkub Exchange is a major player in the Thai market, accounting for approximately 95% of trading volume. As the first company to obtain a digital asset exchange license, Bitkub not only leads the way in terms of transaction volume, but its parent company, Bitkub Capital Group Holdings, has also launched extensive deployment in the Web3 field through multiple subsidiaries.

• governmental support: The Thai government actively promotes cryptocurrency trading,Starting from 2024, profits from cryptocurrency and digital token trading will be exempt from the 7% value-added tax, a policy that further stimulates market vitality.
• market drivers: High participation in Thailand’s cryptocurrency exchange market is primarily driven by high convenience, government incentives, and high income inequality.Thailand’s trading system allows all bank accounts to transfer funds to the exchange, making transactions very convenient. Additionally, income inequality has prompted many Thais to view cryptocurrency investment as an opportunity to change their economic situation.

2、DeFi Market: Participation in Thailand’s DeFi market and its drivers

The Thai DeFi market also shows significant activity, with participants accounting for approximately 20% of CEX participants. This ratio is extremely rare in other countries and reflects Thai investors’ high speculative tendencies and expectations for high returns.

• Main drivers: According to Tiger Research and Kyros Ventures, the average expected return for Thai investors is as high as 10 times, indicating that they are willing to take higher risks in pursuit of high returns. This high speculative tendency is the main driver of high participation in the DeFi market.
• Popular DeFi projects: Arbitrum is currently the most popular DeFi project in Thailand, followed by Optimism and other projects. DeFi projects have further attracted investor participation through airdrops and liquidity mining activities.

3、ICO market: Thailand ICO platform and its operating model

Thailand’s ICO market is strictly regulated, and there are currently seven legally operating ICO platforms, mainly operated by subsidiaries of financial companies. These ICO platforms play a key role in the issuance, consulting and technical support of ICO projects.

Main ICO platforms:

• Token X: A subsidiary of SCBX, providing a full range of services from token issuance consulting to blockchain technology support. Successfully issued the “BNK48 Governance Token”, a utility token used in the entertainment industry.
• Kubix: A subsidiary of Kasikorn Bank, which managed the financing project of the movie “The Destiny of Love” and issued the investment token “Destiny Token”.

• XSpring Digital: A subsidiary of XSpring, it issued the investment token “SiriHub Token” and obtained a digital asset broker and dealer license to support digital asset transactions.

ICO project case:

• BNK48 Governance Token: Published by Thai entertainment company iAM, through the iAM48 application, fans can participate in voting and enjoy various benefits, strengthening the interaction between fans and artists.
• Destiny Token: Issued by GDH 559, it is used to raise funds for the movie “The Destiny of Love”. Investors can receive returns based on the movie’s income and are eligible to participate in special events.

4、OTC Trading: Legality and Growth

Thailand’s OTC trading market is legal and growing rapidly, mainly serving institutional investors. Bitazza is a major player in this space, holding a digital asset brokerage license and quickly launching services to capture the market.

• Market characteristics: OTC trading is favored by institutional investors because of its simplicity of operation and compliance, which is especially suitable for processing large-amount transactions. Retail investors can also participate, but due to the high threshold (Bitazza requires a minimum order amount of $30,000), retail participation is less.
• The main participants: Bitazza dominates the market, processing trading orders through global exchanges or dealers, providing more flexibility and trading varieties than digital asset exchanges.
• Market potential: As corporate demand for OTC transactions increases, Thailand’s digital asset brokerage market shows huge growth potential. Accurate pricing and efficient trade execution are key factors for market success.

1. Market segment analysis

1、Game market:

Thailand’s Web3 gaming market shows huge growth potential, especially in the mobile gaming sector. Thailand’s smartphone penetration rate will reach 71.47% in 2023 and is expected to rise to 97% by 2028, providing a solid user base for the development of Web3 games.

• main game: World-renowned Web3 games such as “Nightcrow”, “Mir4” and “Axie Infinity” are very popular in Thailand. However, local game developers have relatively little experience in developing original games, resulting in lower quality games.

• paradigm shift: As the popularity of the Play-to-Earn (P2E) model declines, user behavior has changed. Players are more likely to cash out their in-game gains immediately. In response to this change, mixed-mode games, such as “Night Crow” that combines Web2 and Web3 elements, are rising and becoming a new development trend. \

2、NFT Market:

Thailand’s NFT market has also experienced a decline in transaction volume amid the global market downturn, but individual artist works and a handful of blue-chip projects have maintained active communities.

• individual artist: The artistic NFT of young Thai artist Gongkan has received widespread attention for his unique style and creativity, and even received praise from Apple CEO Tim Cook, further increasing the popularity of his work.
  

• blue chip project: Projects such as Pudgy Penguins and Azuki have built strong local communities in Thailand, and despite the overall decline in market popularity, these projects have maintained high levels of participation through regular events.

• government participation: The Tourism Authority of Thailand (TAT) launched the “Wonderful Thailand NFT” project, combined with the T2E (Travel to Earn) model, tourists can collect art NFT by visiting specific attractions and use it to enjoy travel-related discounts. This innovative project demonstrates the integration of blockchain technology with the tourism industry.

3、infrastructure:

Thailand’s Web3 infrastructure is constantly developing, with BNB Chain currently dominating the market, but emerging chains such as Arbitrum, Optimism, and Ronin are also gradually emerging.

• BNB Chain: BNB Chain has widespread adoption in Thailand due to its EVM compatibility, strong developer community, and support from the Binance ecosystem.
  

• emerging chain: Arbitrum is strong in the DeFi space, while Ronin and Optimism are rising in the GameFi space. Thailand’s Bitkub Chain is also supporting Web3 games and has launched games such as “Morning Village”, showing a trend of diversified development.

• local chain: Most Thai local chains are private chains used for regulated businesses, Bitkub Chain is the only public chain operating as an Ethereum hard fork mainnet with plans for global expansion in Southeast Asia.

4、Escrow and wallet services:

Thailand’s digital asset custody service market is gradually taking shape, although in the early days no projects applied for a custody service license due to market uncertainty and high capital requirements.

• The main participants: As the market picks up, companies such as RakkaR Digital and Orbix Custodian are starting to apply for hosting service licenses. These companies provide customers with secure digital asset custody services and meet strict regulatory requirements.
• Market dynamics: Although global hosting service providers such as Fireblocks hold a certain share of the Thai market, competition in the market is expected to intensify with the launch of local licensed hosting services.
• Non-custodial wallet: MetaMask is the most widely used non-custodial wallet in Thailand, similar to the situation in other countries.

5、Developer ecosystem:

Thailand’s developer community, while not as large as its neighboring countries, is growing rapidly with support from companies and universities.

• Support projects: For example, Bitkub Chain holds “BKC Developer Promotion Meeting” every month to provide funding for potential projects and support developers through “BKC Developer Tools”. This developer-friendly strategy demonstrates its commitment to advancing the local blockchain ecosystem.

• university role: Major universities such as Chulalongkorn University, Chiang Mai University and Thammasat University actively participate in the training of blockchain talents and operate their own blockchain societies, showing strong interest in the Web3 industry.

• digital nomad: Thailand has attracted a large number of digital nomads due to its long-term visas and low cost of living, which has directly and indirectly promoted the development of the IT industry.

6、Corporate initiatives:

Thailand’s Web3 industry is mainly driven by traditional financial and energy companies, which, with government support, actively invest in Web3 projects.

Major companies:

• SCBX: Through its subsidiaries SCB 10X, Token X and InnovestX, it makes extensive investments in the Web3 field, including ICO platforms, digital asset trading and custody services.
• Kasikorn Bank: Actively participate in digital asset investment analysis, NFT market and digital asset trading through subsidiaries such as KX (Kasikorn X), Kubix and Orbix Trade.
• Gulf Energy Development: Cooperating with Binance to operate the Gulf Binance digital asset exchange.
• PTT Group: Operates ReAcc, a blockchain-based renewable energy trading platform.
• Bitkub: Thailand’s leading blockchain technology and digital asset company has extensive deployment in the Web3 field through multiple subsidiaries, including Bitkub Chain and Bitkub Exchange. \

5.Challenges and Opportunities

Challenges

1. Political Instability

   • Background: Since becoming a constitutional monarchy in 1932, Thailand has experienced 19 military coups. The most recent coup occurred in 2014. Despite a pro-cryptocurrency government coming to power in 2023, Thailand’s political environment remains uncertain.

   • Impact: Political turbulence can lead to policy discontinuity and changes in the regulatory environment, affecting market confidence and investors’ long-term planning.

2. Aging Population

   • Background: Thailand faces a significant aging population issue. In 2023, Thailand’s median age was 40.5 years, much higher than neighboring countries Vietnam (32.8 years) and Laos (24.4 years).

   • Impact: An aging society may result in labor shortages, reduced innovation capacity, and slower economic growth, affecting the Web3 market’s talent supply and technological innovation.

3. Income Inequality

   • Background: Thailand has severe income inequality and extremely uneven wealth distribution. High income inequality can lead to social instability and insufficient consumption capacity.

   • Impact: Although income inequality drives some people to invest in cryptocurrencies actively, the overall lack of consumption capacity may limit the market’s further expansion and adoption.

   Opportunities

4. Young Leadership

   • Background: Despite Thailand’s aging population, the development of the Web3 market is primarily driven by young leaders in their 30s, such as the leadership teams of Bitkub and Cryptomind.

   • Impact: These young leaders have a high acceptance of new technologies, strong innovation capabilities, and can quickly adapt to market changes, driving the development and adoption of Web3 technology.

5. Government Support Policies

   • Background: The Thai government actively promotes the development of the digital economy and Web3 technologies. Pro-cryptocurrency policies, VAT exemption on digital asset trading profits, and support for blockchain technology are crucial measures the government is using to drive market development.

   • Impact: Government support policies provide a favorable market environment, attracting many domestic and international investors and enterprises, helping to boost market confidence and accelerate technological innovation.

6. Participation of Traditional Financial Institutions

   • Background: Thailand’s traditional financial institutions, such as SCBX, Kasikorn Bank, and Gulf Energy Development, actively participate in and invest in Web3 projects, establishing digital asset subsidiaries and funds.

   • Impact: The involvement of traditional financial institutions brings abundant resources and financial support and accelerates the adoption of Web3 technology and applications through their extensive customer base and market influence.

Summary by Aiying

The Web3 market in Thailand is rapidly developing. Despite challenges such as political instability, an aging population, and income inequality, the country shows immense opportunities and development momentum through its young leadership, government support policies, and the active participation of traditional financial institutions. Thailand has established a comprehensive and stringent digital asset regulatory system through the 2018 Emergency Decree on Digital Asset Businesses. This clear regulatory framework has standardized market behavior, improved market transparency and security, and attracted significant investments and enterprise participation. Various sectors, including cryptocurrencies, ICOs, DeFi, retail crypto trading, NFT markets, and the continuously evolving infrastructure and custody services, show significant potential and activity, positioning Thailand as a leader in the Web3 industry in Southeast Asia and globally.

Additionally, as Aiying has learned, the Thai government announced a new visa category for digital nomads and freelancers on May 29. The government has introduced the new Thailand Destination Visa (DTV) for foreigners wishing to work while vacationing. The DTV costs $270 (10,000 THB) and is valid for five years. The stay duration under the DTV is 180 days, which can be extended for another 180 days for the same fee. Holders can work in Thailand for nearly 12 months each time. The visa requires those working remotely in Thailand to provide at least $13,650 (500,000 THB) as support assurance for their spouse and children.

Disclaimer：

1. This article is reprinted from [ Tiger Research].Forward the Original Title ‘[Special Report] 2024 Thailand Web3 Market Report’. All copyrights belong to the original author [Ryan Yoon, Jay Jo, and Yoon Lee]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.