"Digital Assets": An Essential Transformer In the Digital Economy And 10 Reasons to Invest in Thailand

In Brief

On 28th June, I successfully presented to the audience of the Join Foreign Chambers of Commerce in Thailand (JFCCT) an exciting and groundbreaking topic: "Digital Assets, An Essential Transformer in the Digital Economy: The Regulatory Implications in Thailand".

It was a great opportunity and honor, to share my knowledge and insights with an audience of prominent business owners and leaders of the Digital Economy / ICT industry in Thailand.

We all know how to generate, send and receive information on the Internet. The new conversation is about how to create, send and receive value or assets on the Internet.

It is a journey of the evolution of capital for more than 200 years, from the Industrial Revolution (tangible assets) to the formation of an economy based on knowledge and Intellectual Capital (intangible assets).

I also covered other types of capital and economic systems including :

• The ICT Revolution that led to E-commerce.

• The Formation of Data Capital and the Digital Economy

• The Current Data Asset Capital and The Digital Assets Economy

The Elements of the Transformation From the Digital Economy to The Digital Assets Economy

Blockchain was the technological breakthrough that made the digital asset revolution possible. It was important to explain the fundamentals of what Blockchain is all about and how it works.

Categories of Digital Assets And Use Cases

Having a clear understanding of what is a digital asset is critical to comprehend the different use cases.

Thailand's Digital Assets Business Legal Framework

The Royal Emergency Decree On Digital Assets Business Operations ("REDABO") came into play in 2018. It created a clear and comprehensive regulatory framework for the digital assets business in Thailand, with the Security and Exchange Commission (SEC) as the regulatory authority.

With the adoption of the "REDABO", Thailand's Digital Assets economy has been literally "electrified".

Definition Of Digital Assets

The most important part of the "REDABO" is without a doubt, the definition of "Digital Assets" covered by sections 3 and 5. These sections have a particular value in the context of the SEC vs. Ripple Lab case where Ripple has spent USD 200,000,000 in legal expenses just to have a clear definition of what "Digital Assets" means.

As we can see, Thailand's regulatory approach is much more effective from the transaction and social cost perspectives. The definitions are very useful by combining the concept of "Digital Assets" in a technical and broad sense with clear examples as illustrations.

The Centrality of "Electronic Data Units" In the Royal Emergency Decree (REDABO)

The intersection of technology and regulation has always posed a challenge to regulators when taking into consideration the legal and regulatory implications. Despite the efforts of Thai lawmakers to qualify "Digital Assets" by referring to "electronic data units", there is a need for better explanations for non-lawyers and non-tech nerds to understand what "Digital Asset" is all about.

The most effective way to achieve this objective of simplification is to relate "electronic data units" to the use cases that the public could understand. As a matter of fact "electronic data units" have made the following activities possible:

• Data units for information and communication were at the base of the Internet
• Data units for the creation of contracts and transactions have made "Electronic Commerce" possible
• Data units to commit crimes have generated "Cybercrime"
• Data units used to pay for goods or services or store of value have facilitated "Cryptocurrencies"
• Data units for the creation of rights or obligations are the foundations of "Digital Tokens"
• Data units used to create property and value are at the base of "Digital Assets" in general
• Data units used to create the identity of individuals are the elements of "Data Subject"
• Data units generate the "Virtual World" known as the "Metaverse" which covers every possibility offered by data unit applications and use cases.

In the end "Data units" can be compared to the photon in the manifestation of energy (light) in the universe.

Data Democratization, Literacy, and Culture

Data democratization is presented as the process of making data accessible, understandable, and usable by everyone, regardless of their technical skills or roles in an organization.

But such dissemination would be impossible without data literacy and culture which can only be achieved with the basics of data science.

Let us dive a little bit more into the subject of data science, to have a better comprehension of what are fundamentally electronic data units.

Data Science and Electronic Data Units

Simply put, according to data science, data units are units of information that are used to measure and quantify data. They represent the size, capacity, or amount of digital information. Some common data units include:

1. Bit (b): The smallest unit of data, represented as a binary digit, either 0 or 1.

2. Byte (B): Consists of 8 bits. It is the fundamental unit of storage in computer systems and is commonly used to measure file sizes and data transfer rates.

3. Kilobyte (KB): Approximately 1,024 bytes. Often used to measure small amounts of data, such as text files or simple images.

4. Megabyte (MB): Approximately 1,024 kilobytes or 1,048,576 bytes. Commonly used to represent larger files, such as photos or documents.

5. Gigabyte (GB): Approximately 1,024 megabytes or 1,073,741,824 bytes. Typically used to measure the capacity of storage devices (e.g., hard drives) and larger data sets.

6. Terabyte (TB): Approximately 1,024 gigabytes or 1,099,511,627,776 bytes. Used to measure very large amounts of data, such as extensive databases or high-definition videos.

7. Petabyte (PB): Approximately 1,024 terabytes or 1,125,899,906,842,624 bytes. Often used in big data applications or when discussing large-scale data storage.

8. Exabyte (EB), Zettabyte (ZB), and Yottabyte (YB): These are even larger units used to represent enormous quantities of data and are mostly encountered in theoretical or specialized contexts.

Data units provide a standardized way to measure, compare, and communicate the size or amount of digital information. This is the concept adopted by the REDABO to define "Digital Assets" as the result of the processing of "Electronic Data Units".

Categories of Digital Assets Business

After identifying and defining Digital Assets, the "REDABO" outlines the various categories of businesses that can flourish as "Digital Assets Business Operators".

Thailand Is Well Placed For a Vibrant and Dynamic Digital Assets Business Revolution

With pioneering Digital Assets regulatory clarity and government support, Thailand is poised to attract more investors and businesses to participate in the sector, adding significant value to the overall economic landscape of the country.

10 Reasons to Invest in the Digital Assets Industry in Thailand

With the increase in the global adoption of cryptocurrencies, the digital assets industry is experiencing rapid growth and presents a lucrative investment opportunity for individuals and businesses alike.

While the United States is losing its position as the go-to destination for digital asset businesses due to regulatory challenges, Thailand has emerged as a favorable alternative.

Below are ten compelling reasons to consider investing in the digital assets business in Thailand.

1. A Shift from the US Market: Increasingly stringent regulations and a litigious environment in the United States have prompted digital companies to seek friendlier jurisdictions, particularly in Asia. Thailand has become an attractive destination for these companies, offering a conducive environment for digital asset businesses to thrive.

2. A Flourishing Digital Assets Industry: Thailand provides an ideal ecosystem for the digital assets industry to prosper. With advanced information and communication technology infrastructure and a tech-savvy population, the country offers the necessary connectivity and support for digital asset ventures.

3. A Government Policy to Foster Innovation: Thailand's government has made significant efforts to attract innovation in digital technology. Special visa policies, such as "Smart Visa" have been implemented to encourage foreign investors, including those in the digital assets sector, to establish and operate businesses in the country. This demonstrates a proactive approach to supporting the growth of the industry.

4. The Royal Emergency Decree on Digital Assets Business Operations: In 2018, Thailand introduced the Royal Emergency Decree on Digital Assets Business Operations, which brought much-needed clarification, clarity, and direction to digital assets innovation and economy. This decree which was commented on by many prominent legal professionals, provides a solid regulatory framework, instilling confidence in investors and businesses operating in the sector.

5. An Amicable Dispute Resolution Ecosystem: Thailand has established a robust dispute resolution ecosystem based on international arbitration. Institutions such as the Thailand Arbitration Center (THAC), the Thai Arbitration Institute (TAI), and the Office of the Arbitration Tribunal (OAT) offer efficient and effective mechanisms to resolve disputes amongst investors, ensuring a fair and amicable environment for conducting business.

6. Flexible Corporate Laws: Setting up companies in Thailand and owning digital assets is facilitated by flexible corporate laws. Investors can establish their ventures with relative ease, benefiting from the supportive legal framework that enables efficient business operations.

7. A Favorable Taxation Environment: Currently, there is no specific taxation on digital asset businesses in Thailand. This tax-friendly environment presents a significant advantage for investors, allowing them to maximize their returns on investment and allocate resources more efficiently.

8. Support From Banking Financial Institutions: Thailand's banking sector is embracing the digital assets industry, facilitating the movement of currencies from fiat to digital. This support from financial institutions enables seamless transactions and provides added legitimacy to the digital assets business ecosystem.

9. A Strategic Geographical Location: Thailand's strategic geographical location in Southeast Asia makes it an ideal gateway to the region's growing digital assets market. With its robust connectivity to neighboring countries and access to a large consumer base, investing in the digital assets business in Thailand provides opportunities for expansion and increased market reach.

10. A Forward-Looking Approach: Thailand's commitment to developing the digital assets industry reflects a forward-looking approach. The government's proactive stance, coupled with supportive policies and regulations, demonstrates a long-term vision for nurturing a thriving digital economy.

Conclusion: As the United States faces regulatory challenges and companies seek more favorable jurisdictions for their digital asset businesses, Thailand emerged as an alternative investment destination.

With a conducive ecosystem, supportive government policies, robust dispute resolution mechanisms, flexible corporate laws, a favorable taxation environment, and backing from financial institutions, Thailand offers a compelling proposition for investors looking to tap into the digital assets industry.

By considering the ten reasons highlighted in this article, investors can explore the immense potential that Thailand holds as a digital assets business hub in Southeast Asia.

End

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