Cryptocurrency Southeast: Laws and Regulations in a Popular Part of Asia
Date: 2024-06-05 Author: Henry Casey Categories: CRYPTO PAYMENTS
Southeast Asia is emerging as an important region for the cryptocurrency market, offering different approaches to regulating digital assets. This overview examines the legal rules and requirements in some of the region's most interesting jurisdictions.
Asset Classification
In Thailand, legislation distinguishes between two types of assets: cryptocurrencies and digital tokens. Cryptocurrency is used as a medium of exchange, while digital tokens serve as proof of rights. This approach makes it possible to clearly distinguish between different types of digital assets and apply appropriate rules to them.
Requirements for Issuers and Service Providers
Issuers of cryptocurrencies and digital tokens in Thailand must meet strict requirements, including significant capital investment, qualified personnel and quality code. Service providers are divided into three categories:
- Digital asset exchange
- Digital asset brokers
- Digital asset dealers
All three types of activities require a license from the Ministry of Finance, issued on the recommendation of the Securities and Exchange Commission. The law also requires companies to be incorporated in Thailand and not to combine the functions of an exchange with those of a broker or dealer.
Taxation and Benefits
Thailand has tax incentives for cryptocurrency companies and users, including VAT exemption until 2023 and tax incentives for companies issuing investment tokens. Other transactions are subject to a 15% capital gains rate. Progressive personal income tax can reach 35%.
Cryptocurrency is legal in Thailand, but is subject to strict anti-money laundering and anti-terrorist financing laws. Violators may face site blocking and significant fines.
The Indonesian Commodity Futures Trading Regulatory Agency (Bappebti) has issued several regulations governing the cryptocurrency market. Cryptocurrencies are defined as intangible goods that use cryptography and distributed ledgers.
Types of Regulated Crypto Business
Indonesia regulates futures exchanges, crypto futures clearing houses, cryptocurrency custody managers and cryptocurrency traders. The issuance of tokens (ICO) is not yet regulated. From January 2025, the responsibilities of the main regulatory agency will be transferred to the Financial Services Authority (OJK).
Crypto transactions in Indonesia are subject to VAT of 0.11%, while crypto investments are subject to capital gains tax of 0.1%.
Cryptocurrencies are not prohibited in Indonesia, but are subject to strict regulations. Violations of civil laws may result in severe penalties.
Definitions and Categories of Cryptocurrencies
In Singapore, cryptocurrency can be defined as "electronic money" or "digital payment token". Electronic money is denominated in any currency and is used for payment transactions. A digital payment token is a unit of value that is not tied to a currency and is used to pay for goods and services.
Cryptocurrencies in Singapore are subject to general money laundering laws. Companies offering cryptocurrency services must obtain licenses for seven types of payment services, including issuing invoices, issuing electronic money and remittances.
Taxation
Taxation of cryptocurrencies in Singapore depends on the type of activity. Profits from cryptocurrency trading by an entity are subject to income tax, but capital gains from long-term investments are not taxed. For resident companies, taxes range from 0 to 22%.
Cryptocurrency has been legalized in Singapore. Violations of money laundering laws can result in severe fines of up to $250,000.
Southeast Asia offers diverse and interesting approaches to regulating cryptocurrencies. Countries such as Thailand, Indonesia and Singapore are demonstrating a willingness to adapt to new financial realities and create favorable conditions for the development of the crypto industry, while ensuring investor protection and stability of financial markets.
