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SEC summarizes academic panel discussion on “Libra” for country development in digital age



Tuesday 9 July 2019 | No. 83 / 2019


Bangkok, Tuesday 9 July 2019 - SEC has held an academic panel discussion on “Libra: A Brave Step of Facebook: Step Forward the Borderless World” on 8 July 2019, aiming to become a stage in exchanging aspects and sharing experience from state and private practitioners for further extension of digital asset business development and supervision. More than 400 participants made registration to attend the panel discussion at SEC Office with more than 29,000 views on Facebook Live.

SEC Secretary-General Ruenvadee Suwanmongkol said that SEC has organized a panel discussion as an academic stage, aiming people to understand the background of “Libra” and which of its parts involving laws in Thailand, and exchange aspects from practitioners for digital asset consideration.

“SEC will be an agency which opens for comments, enriches knowledge for all relevant parties, holds academic stages for interesting issues for exchange of views, and supports development and application of innovations and technology in capital market processes. SEC will monitor progress in aspects and be prepared for changes,” SEC Secretary-General said.

In this panel discussion, panelists included Dr. Bhume Bhumiratana - SEC consultant, Dr. Narun Popattanachai – Government Legal Counsel at Office of the Council of State, Dr. Sumaporn (Srisuntorn) Manason – Legal Expert at the Fiscal Policy Office, Mr. Thakorn Piyapan – Chairman of Krungsri and Head of Krungsri Digital Banking and Innovation at Bank of Ayudhya, Mr. Jirayut Srupsrisopa – Co-Founder and Chief Executive Officer of Bitkub Capital Group Holdings, and Proud Limpongpan – Chief Strategy Officer of Zipmex Asia. Ms. Archari Suppiroj, Director of SEC’s FinTech Department acted as the moderator.

Based on the panel discussion, there are the following issues. “Libra” is regarded as a challenge to the world and may become a key turning point for widespread use of cryptocurrency. Related state agencies must follow Libra’s progress with close discussion to assess impacts and proper supervision. On the private-sector front, how long Libra will stay is not certain but social media and cryptocurrency are expected to stay long.

The overall picture of Libra: On 18 June 2018, Facebook and its founding members – the world’s 28 leading companies like Visa, MasterCard, Paypal, eBay and Uber – has introduced a cryptocurrency called “Libra” which is expected to be used as the digital currency in 2020. Libra is expected to become the digital currency that is used broadly in the world with easy access, speed and low costs. It is a stable coin backed by assets with less volatility, unlike bitcoin.

Moreover, Facebook and its founding members have established the Libra Association in Switzerland. This non-profit organization aims to drive and take care of Libra issues including blockchain and management of related assets. Before opening for actual service, Facebook intends to find about 100 founding members to make investment of 10 million US dollar each via an offer of Libra investment token (not the same coin as Libra cryptocurrency which will be introduced as a mechanism for payment). Facebook will also set up a company Calibra to provide a wallet service for Libra users.

Impacts from Libra – Opportunities and Challenges: Given over 2,000 million Facebook users worldwide, Libra will likely bring broader impacts. Cross-border fund transfer among individuals will be more efficient and be made instantly, similar to sticker sending in line application. The banking and financial sector will be affected directly. Self-adjustment must be made and new forms of business must be found to cope with this likely trend as it could lose the fund transfer business.

E-commerce will be shifted to social commerce which allows transactions made through social media. SMEs will gain easier access into global e-commerce. Social banking will replace mobile banking. Others like Alibaba, Google, Tencent and Amazon may come to compete with Libra

Impacts to the Public Sector: The public sector may not be able to collect data for fiscal and monetary policy setting as transactions or activities may not be conducted through operators or intermediaries under the public-sector supervision. Meanwhile, the public sector should not hinder or cease innovations but should study and learn from them closely for the best management of risks, particularly systematic risks. Therefore, consumer protection policy can be set properly and efficiently for benefits to Thailand.

Legal Aspects and Supervision: Libra is the challenge to supervisory agencies worldwide which are keeping an eye on cautiously, trying to understand but not welcoming without any regulations governing the cryptocurrency. To Thailand, regulating Libra with the existing laws may be difficult. More consideration must be taken on whether or not Libra is money, who can be authorized resellers of Libra, Libra can be governed under the related laws like those related to financial institutions’ businesses, foreign exchange control or e-Payment? Laws may need amendments or additional laws may be required.

To taxing, it is necessary for a new conceptual process. Challenges for governing is taxation on e-commerce which moves to sell products and services on Facebook with Libra as a medium of payment. The Revenue Department may not receive information for supervision.

Supervision under the royal decree on digital asset businesses, B.E. 2561 is comprised of two (2) parts: 1) issuing and selling of Libra investment token (not Libra cryptocurrency). If the token will be offered in Thailand, a permission is required. However, this possibility is very low as those who are allowed to invest in Libra investment token must be Libra Association’s members whose qualifications are very high. The general public are not permitted to invest in Libra investment token.; 2) Permission for business intermediaries (trading centers, brokerage firms or traders) is required to identify themselves to service trading of Libra in Thailand.

Protection of Personal Information: The public sector should play a supervisory role to prevent threats to privacy and educate people for awareness of this issue. Thailand has the law governing personal information and businesses must receive permission from service users before using information, otherwise, businesses will be guilty by laws.

Risks and cautions: If anyone persuades investors to invest in a Libra project, it is highly likely that it is a deception as people are not able to access into Libra investment token. Libra is the cryptocurrency which has not yet been in service now.  

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Building Confidence in the Capital Market
NEWS
Securities and Exchange Commission
Corporate Communication and Investor Service Department
Tel. (66)2033-9502-5 E-mail: press@sec.or.th
No. 83 / 2019 Tuesday 9 July 2019
SEC summarizes academic panel discussion on “Libra” for country development in digital age
Bangkok, Tuesday 9 July 2019 - SEC has held an academic panel discussion on “Libra: A Brave Step of Facebook: Step Forward the Borderless World” on 8 July 2019, aiming to become a stage in exchanging aspects and sharing experience from state and private practitioners for further extension of digital asset business development and supervision. More than 400 participants made registration to attend the panel discussion at SEC Office with more than 29,000 views on Facebook Live.

SEC Secretary-General Ruenvadee Suwanmongkol said that SEC has organized a panel discussion as an academic stage, aiming people to understand the background of “Libra” and which of its parts involving laws in Thailand, and exchange aspects from practitioners for digital asset consideration.

“SEC will be an agency which opens for comments, enriches knowledge for all relevant parties, holds academic stages for interesting issues for exchange of views, and supports development and application of innovations and technology in capital market processes. SEC will monitor progress in aspects and be prepared for changes,” SEC Secretary-General said.

In this panel discussion, panelists included Dr. Bhume Bhumiratana - SEC consultant, Dr. Narun Popattanachai – Government Legal Counsel at Office of the Council of State, Dr. Sumaporn (Srisuntorn) Manason – Legal Expert at the Fiscal Policy Office, Mr. Thakorn Piyapan – Chairman of Krungsri and Head of Krungsri Digital Banking and Innovation at Bank of Ayudhya, Mr. Jirayut Srupsrisopa – Co-Founder and Chief Executive Officer of Bitkub Capital Group Holdings, and Proud Limpongpan – Chief Strategy Officer of Zipmex Asia. Ms. Archari Suppiroj, Director of SEC’s FinTech Department acted as the moderator.

Based on the panel discussion, there are the following issues. “Libra” is regarded as a challenge to the world and may become a key turning point for widespread use of cryptocurrency. Related state agencies must follow Libra’s progress with close discussion to assess impacts and proper supervision. On the private-sector front, how long Libra will stay is not certain but social media and cryptocurrency are expected to stay long.

The overall picture of Libra: On 18 June 2018, Facebook and its founding members – the world’s 28 leading companies like Visa, MasterCard, Paypal, eBay and Uber – has introduced a cryptocurrency called “Libra” which is expected to be used as the digital currency in 2020. Libra is expected to become the digital currency that is used broadly in the world with easy access, speed and low costs. It is a stable coin backed by assets with less volatility, unlike bitcoin.

Moreover, Facebook and its founding members have established the Libra Association in Switzerland. This non-profit organization aims to drive and take care of Libra issues including blockchain and management of related assets. Before opening for actual service, Facebook intends to find about 100 founding members to make investment of 10 million US dollar each via an offer of Libra investment token (not the same coin as Libra cryptocurrency which will be introduced as a mechanism for payment). Facebook will also set up a company Calibra to provide a wallet service for Libra users.

Impacts from Libra – Opportunities and Challenges: Given over 2,000 million Facebook users worldwide, Libra will likely bring broader impacts. Cross-border fund transfer among individuals will be more efficient and be made instantly, similar to sticker sending in line application. The banking and financial sector will be affected directly. Self-adjustment must be made and new forms of business must be found to cope with this likely trend as it could lose the fund transfer business.

E-commerce will be shifted to social commerce which allows transactions made through social media. SMEs will gain easier access into global e-commerce. Social banking will replace mobile banking. Others like Alibaba, Google, Tencent and Amazon may come to compete with Libra

Impacts to the Public Sector: The public sector may not be able to collect data for fiscal and monetary policy setting as transactions or activities may not be conducted through operators or intermediaries under the public-sector supervision. Meanwhile, the public sector should not hinder or cease innovations but should study and learn from them closely for the best management of risks, particularly systematic risks. Therefore, consumer protection policy can be set properly and efficiently for benefits to Thailand.

Legal Aspects and Supervision: Libra is the challenge to supervisory agencies worldwide which are keeping an eye on cautiously, trying to understand but not welcoming without any regulations governing the cryptocurrency. To Thailand, regulating Libra with the existing laws may be difficult. More consideration must be taken on whether or not Libra is money, who can be authorized resellers of Libra, Libra can be governed under the related laws like those related to financial institutions’ businesses, foreign exchange control or e-Payment? Laws may need amendments or additional laws may be required.

To taxing, it is necessary for a new conceptual process. Challenges for governing is taxation on e-commerce which moves to sell products and services on Facebook with Libra as a medium of payment. The Revenue Department may not receive information for supervision.

Supervision under the royal decree on digital asset businesses, B.E. 2561 is comprised of two (2) parts: 1) issuing and selling of Libra investment token (not Libra cryptocurrency). If the token will be offered in Thailand, a permission is required. However, this possibility is very low as those who are allowed to invest in Libra investment token must be Libra Association’s members whose qualifications are very high. The general public are not permitted to invest in Libra investment token.; 2) Permission for business intermediaries (trading centers, brokerage firms or traders) is required to identify themselves to service trading of Libra in Thailand.

Protection of Personal Information: The public sector should play a supervisory role to prevent threats to privacy and educate people for awareness of this issue. Thailand has the law governing personal information and businesses must receive permission from service users before using information, otherwise, businesses will be guilty by laws.

Risks and cautions: If anyone persuades investors to invest in a Libra project, it is highly likely that it is a deception as people are not able to access into Libra investment token. Libra is the cryptocurrency which has not yet been in service now.  

_________________________