Stable vision: Binance pushes for baht-backed crypto in Phuket
The Government of Thailand is being urged by Binance’s Thai branch to explore the development of stablecoins tethered to the baht, intended for use within the country and particularly within the proposed Phuket crypto sandbox. Unlike volatile digital assets such as Bitcoin, stablecoins are linked to fiat currencies, offering a more stable alternative.
Nirun Fuwattananukul, CEO of Gulf Binance, explained that the Phuket sandbox, a brainchild of former Prime Minister Thaksin Shinawatra, could delve into stablecoins pegged to specific currencies to mitigate volatility.
Highlighting US dollar-backed stablecoins like USDT and USDC, he proposed that Thailand could feasibly create a baht-pegged stablecoin for local transactions.
However, Nirun noted that such an initiative would face significant challenges. Developing a robust regulatory framework would be crucial to ensure the stability and security of a baht-backed stablecoin. Unlike Bitcoin, which enjoys global recognition, a new stablecoin would need considerable efforts to build trust and secure widespread adoption.
Set to launch in October, the Phuket crypto sandbox aims to allow foreign tourists to make purchases using cryptocurrency. By bolstering the purchasing power of digital nomads, the initiative seeks to position Thailand at the forefront of financial innovation.
The Bank of Thailand has so far remained tight-lipped about using cryptocurrencies for payments, citing concerns about potential repercussions on the baht and financial stability.
Meanwhile, Finance Minister Pichai Chunhavajira announced plans to tokenise government bonds, transforming them into stablecoins. He underscored that government bonds, regarded as highly trustworthy assets, are traditionally acquired by financial institutions. The aim is to make these bonds more accessible to individual investors.
Pichai expressed confidence that introducing a stablecoin would not destabilise the baht, as it wouldn’t inject new money into the system. Discussions with the central bank are on the horizon for this initiative.
Additionally, Nirun suggested that the government weigh up the pros and cons of incorporating Bitcoin as a payment method within the sandbox.
While Bitcoin is the most recognised and widely accepted cryptocurrency, its price volatility and slower transaction speeds make it less suited for everyday payments. These factors need careful evaluation in the decision-making process.
Nirun emphasised that the focus should be on maximising the benefits of the sandbox initiative, balancing innovation with practicality. This involves considering the regulatory, technological, and adoption challenges of the chosen cryptocurrency, reported Bangkok Post.
The right choice should align with Thailand’s economic ambitions and the overarching goals of the sandbox project.
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