HashKey Capital: Blockchain Ecosystem Report for Thailand in 2023

Thailand Blockchain and Cryptocurrency Ecosystem Overview

1.1 Crypto Data Analysis Platform Witnesses High Visitor Traffic

In 2023, the average monthly visitation to the CoinMarketCap website reached 648,000, constituting 0.94% of the total national population. Thailand's per capita visitation rate surpassed that of the United States by 0.21%.

1.2 Significant Crypto Asset Trading Volume in Thailand

According to data from leading digital asset exchanges in Thailand, such as Bitkub, Bitazza (broker), and Satang, the total trading volume from January to October 2023 amounted to $116,436,471,138.81, equivalent to approximately 4.1 trillion Thai Baht. In 2023, Bitkub claimed the largest market share, accounting for 77.04% of the total annual trading volume; Bitazza and Satang held market shares of 21.60% and 1.36%, respectively. Notably, Satang was acquired by Kasikornbank (KBANK) in 2023 and subsequently rebranded as Orbix.

1.3 Rising Interest of Thai Users in Digital Asset Trading

Thailand holds the tenth position on Chainalysis's Crypto Adoption Index, which evaluates user activities on centralized exchanges, P2P trading, and DeFi protocols.

• Exchanges: Thailand's digital asset exchanges currently boast over 2.94 million user accounts, constituting 4.27% of the total national population. This surpasses half of the 5.5 million accounts in the stock market, indicating rapid growth in Thailand's crypto industry.

• Binance: From January to November 2023, Thai users averaged 116,877 visits to Binance per month, reaching a peak of 303,057 visits in January 2023.

• Metamask: From September 2020 to August 2023, Metamask wallet was downloaded over 797,931 times in Thailand. The highest monthly downloads occurred in November 2021, with 88,539 downloads, likely influenced by the popularity of GameFi and the metaverse.

• DEX: During the 2021 bull market, Thai users averaged 35,000 monthly visits to DEX platforms like PancakeSwap, with a decrease in visits after the arrival of the bear market.

• Opensea: In the NFT boom of 2022, Opensea had an average monthly visitation of 48,000 in Thailand, peaking at 65,000 visits in July. Traffic declined during the bear market.

Clear Regulatory Framework with Seven Licenses in Thailand

Thailand's financial industry is subject to high regulatory scrutiny, and the regulatory framework in the digital asset space is well-defined. The Securities and Exchange Commission of Thailand (SEC) has adopted a follow-the-leader approach, drawing inspiration from countries such as the United States, Japan, Hong Kong, and Singapore. The primary legislation governing this space is the Emergency Decree on Digital Asset Businesses, B.E. 2561. Financial institutions in Thailand, including banks and asset management entities, are required to report their investment and professional activities to the SEC.

Assets and activities regulated by the decree include:

• Regulated assets: coins, tokens

• ICOs: Covering both ICO issuers and ICO portals

• Operation of digital asset businesses: Encompassing exchanges, brokers, dealers, funds, and advisory services

The seven licenses related to digital assets are:

• Digital Asset Exchange

• Digital Asset Broker

• Digital Asset Dealer

• Digital Asset Fund Manager

• Digital Asset Advisory Service

• Digital Asset Custodial Wallet Provider

• ICO Portal

Cryptocurrency

is currently categorized as a commodity, subject to a 7% transaction tax. Efforts are underway to reclassify crypto as an investment similar to stocks.

Active Crypto Ecosystem in Thailand with Strong Leadership

Digital asset activities in Thailand are primarily centered around trading, broker/dealer services, and tokenization, with key players dominating the landscape. In recent years, several traditional large enterprises have entered the digital currency market, including major banks like Siam Commercial Bank (SCB) and KBANK, as well as leading energy companies such as GULF and PTG Energy.

• Exchanges: In addition to the previously mentioned high-traffic exchanges like Bitkub and Orbix, the Thai clean energy power company Gulf, in collaboration with Binance, has established a joint venture named Gulf Binance Co., Ltd. It has obtained a license allowing the creation of a crypto asset platform but is not yet operational. Innovest X, an investment app introduced by SCB, permits investors to engage in Thai stocks, foreign stocks, bonds, digital assets, and funds.

• ICO Portals: Two major Thai banks, SCB and KBANK, have ventured into ICO portal businesses. SCB's ICO portal is TokenX, and KBANK's is Kubix. Additionally, XSpring has participated in ICOs, providing a sales channel for the Sirihub Token, an investment token for Sansiri real estate projects. Sansiri is one of Thailand's largest real estate developers, and Thailand's Prime Minister-elect, Srettha Thavisin, was formerly its CEO.

• Broker/Dealers: Digital asset broker and dealer activities in Thailand fall under regulated activities. Licensed brokers include Bitazza, mentioned earlier, and InnovestX launched by SCB. XSpring also introduced a fully integrated cryptocurrency trading platform in 2022, engaging in broker and dealer activities. PTG Energy and Unit jointly established Maxbit, holding a broker license issued by the SEC, but operations have not yet commenced.

• Advisory: Cryptomind Advisory, a subsidiary of Cryptomind, is the first company in Thailand to hold a license for digital asset advisory services. Its product range includes Cryptomind Research, covering in-depth research articles, industry reports, weekly reports, Cointalk, and cryptocurrency-related news. Cryptomind is also one of the representative investee companies of HashKey Capital in the local Thai market.

• VC: SCB 10x is SCB's venture capital company, and KX is the venture capital company launched by KBTG, a subsidiary of KBANK.

• Web3: Local Web3 projects in Thailand mainly focus on the gamefi/metaverse sector. Key projects include the gaming guild GuildFi, with investors such as Coinbase Venture, Animoca Brands, Pantera, making it one of Southeast Asia's most influential gaming guilds. Additionally, some NFT projects, such as 3 Landers and LonelyPop, enjoy popularity in the community.