The misfortune of Chinese bitcoin miners has made some Thai entrepreneurs happy, taking advantage of the umpteenth crackdown on cryptocurrencies in China. Can Thailand become a new paradise for crypto businesses as a result?
Cryptocurrency mining more profitable without China
Al Jazeera’s December 29, 2021 article reports on entrepreneurs in Thailand who have taken advantage of Chinese miners’ capitulation following the country’s new cryptocurrency ban in September 2021. A “coordination mechanism” has been set up by 10 Chinese state authorities, including the People’s Bank of China, to prevent financial players from participating in any cryptocurrency transactions.
A miner based in Thailand, for example, said he recovered his $30,000 investment to set up a small solar-powered cryptocurrency mining unit within three months.
The exit of Chinese miners, which was accompanied by a decrease in the difficulty of hashing, has also benefited miners around the world who remained active, and were able to mine bitcoins at a relatively lower cost.
Competitively priced ASIC miners
Another entrepreneur in Thailand, Pongsakorn Tongtaveenan, has sold hundreds of Chinese ASIC miners to small local investors. According to Pongsakorn, the price of ASICs would have recorded a 30% drop, following the shutdown of mining companies in China, before returning to normal.
The entrepreneur cites two factors that would explain the growing popularity of retail mining in the country: residents are looking for a new stable source of income during the pandemic, and investors are more optimistic about the future of cryptocurrencies.
Cryptocurrencies in Thailand: between adoption and restrictions
This growing interest in crypto-currencies by the Thai people, however, contrasts with the position of the country’s authorities towards them. The governor of the Bank of Thailand, Sethaput Suthiwartnarueput, indicated in a December 14, 2021 interview with the Bangkok Post, that his institution would publish in January 2022, a consultation document containing the “red lines” for crypto-currencies.
The central bank is working with Thailand’s SEC and the Ministry of Finance to define specific restrictions for cryptocurrencies. For example, crypto-currencies will not be allowed to become a means of payment in the country.
However, the Thai authorities do not seem to want to ban cryptocurrencies from the country, aware of the opportunities offered by the sector. The Tourism Authority of Thailand is studying the advantages of creating a utility token to boost tourism.