BANGKOK — Cryptocurrency experts support the government’s idea of investigating the use of Bitcoin or other cryptocurrencies for payments in tourist destinations such as Hua Hin or Phuket.
They see this as a positive move that will encourage a more systematic approach to the use of cryptocurrencies and make it easier for foreigners to spend large sums of money, for example when buying condos or houses, without having to carry large amounts of cash. Thailand is seen as ripe for this move, with examples from over a hundred countries that have designated certain cities for cryptocurrency use, including the US, Switzerland, Argentina and Dubai.
This comes after former Prime Minister Thaksin Shinawatra discussed the government’s concept of having the Ministry of Finance look into setting up a “sandbox” zone in tourist cities such as Phuket or Hua Hin.
In these zones, Bitcoin and other cryptocurrencies could be used instead of traditional currencies. He also mentioned the issuance of a government-guaranteed stablecoin to increase economic liquidity and potentially boost GDP growth to 3.5 percent next year.
Mr. Pawoot Pongvitayapanu, CEO of Pay Solutions, a digital payment gateway provider, said that setting up such a sandbox area was a good idea as the use of bitcoin and cryptocurrencies already existed in Thailand but could not be fully monitored at present. By encouraging organized use, unregulated funds could be brought back into the system.
He pointed out that foreign nationals in several Thai provinces, who often have to spend large sums of money — several million baht to buy condominiums or houses — have to bring money into the country. The use of traceable cryptocurrencies could help to capture these previously uncontrolled funds. Payment solution developers are ready to participate in the testing phase.
Thailand is ready for cryptocurrencies
Mr. Pawoot added that from a technological perspective, the infrastructure for cryptocurrency payments is already in place. A few years ago, many companies tried to offer crypto payment options, but those efforts were halted due to legal concerns about currency regulations that could conflict with recognizing cryptocurrencies as a means of payment.
One option is to test whether Bitcoin and cryptocurrencies are recognized as legal tender. In terms of regulation, there are already crypto exchanges in Thailand that are regulated by the Securities and Exchange Commission (SEC). Their role may need to be expanded so that they can serve as the main channels for the settlement and storage of crypto transactions and the authorities can monitor them. This would bring the use of cryptocurrencies from foreign exchanges under local regulation.
“We do not need to build new systems from scratch. We just need to expand the existing regulated services,” he said. “However, a key point is that it could be difficult to determine the physical location of a user in a digital world if the system is in a sandbox with limited geographical reach. This is something that still needs to be investigated in practice
Merchants Still Concerned About Volatility
Assistant Professor Dr. Udomsak Rakwongwan from the Department of Mathematics at Kasetsart College and co-founder of the FWX platform said that efforts to allow cryptocurrencies as a means of payment for general retail purchases have been ongoing for a long time. Currently, regulators may revisit these discussions.
The main problem lies in usage. Many merchants are reluctant to accept Bitcoin or other cryptocurrencies because they cannot easily record them in their accounts and have to find ways to convert them into cash. Another problem is the volatility of the Bitcoin price, which can fall by up to 30 percent in a single day. Even stablecoins, while less volatile than Bitcoin, are still subject to exchange rate fluctuations.
About three years ago, some crypto exchanges offered to instantly convert digital assets received into Thai baht and transfer them to traders’ bank accounts. However, due to regulatory hurdles that had not yet caught up, these projects were put on hold.
Thailand Has Already Tested This
A similar sandbox-like experiment was already conducted during Devcon 2024 (Ethereum Developer Conference 2024) in Bangkok at the Queen Sirikit National Convention Center. SCB (Siam Commercial Bank) launched a sandbox that enabled crypto payments in a limited area by introducing a special digital wallet.
Merchants around the convention center could receive Bitcoin or crypto payments without realizing it, as they were automatically converted to baht as soon as they arrived in their accounts.
This sandbox was reserved exclusively for foreign participants of the conference, who had to undergo a KYC check so that the organizers could control who was allowed to use the experimental wallet. Merchants also had to register so that they could accept payments from these wallets. Setting up a test area for crypto payments is therefore feasible and could be extended from the convention center area to entire cities.
Bitcoin Tourism Worldwide
“Prachachat Business” has compiled information from countries that allow the use of Bitcoin and other cryptocurrencies for spending, particularly in tourism — an idea sometimes referred to as Bitcoin tourism. The concept is based on the belief that people who hold large amounts of Bitcoin generally do not want to convert it to cash, mainly to maintain the privacy and secrecy of their assets or as part of a lifestyle that rejects fiat currency.
Another simple reason is that using Bitcoin incurs network fees that are sometimes higher than the price of the goods purchased, making it less attractive for everyday transactions.
Nevertheless, these people have high purchasing power. With the right environment or ecosystem, it is possible to attract significant funds from this group.
El Salvador was the first country to embrace this concept by declaring Bitcoin legal tender in 2021. The country has established a second-tier payment network through its national digital wallet, Chivo. This facility allows users to pay with Bitcoin and stablecoins pegged to the US dollar without incurring any fees.
Stablecoins Gaining Popularity
Discussions with BNB blockchain developers and crypto payment solution providers suggest that the trend in daily use of cryptocurrencies is moving towards stablecoins — tokens pegged to fiat currencies — rather than Bitcoin. Many stablecoin projects have received recognition from governments and have been integrated by private companies into payment systems that combine traditional and digital currencies.
In Dubai, United Arab Emirates (UAE), for example, residents’ daily transactions via Visa or Mastercard terminals can be integrated with crypto payment applications. Users can load stablecoins onto a virtual debit card provided by payment gateway providers such as Kast or Alchemy (a Singapore-based company) and then pay at merchants ranging from small stores to large shopping malls.
They can choose to pay in AED or USD as if they were using a Visa or Mastercard credit/debit card. Merchants always receive their payments in AED, the currency of the United Arab Emirates.
In the United States, there are pilot zones such as the “Blockchain Bay” in San Francisco,” a technology center that plays a pioneering role in the integration of digital currencies. Buenos Aires in Argentina also has over 130 businesses that accept Bitcoin and other cryptocurrencies, making the city very crypto-friendly. In Zug, Switzerland — known as Crypto Valley — crypto payments are widely accepted.
Even in Singapore, which has not yet fully embraced cryptocurrencies, travelers can pay for certain services on digital platforms with stablecoins.
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