Thailand’s recent decision to exempt capital gains tax on cryptocurrency transactions for five years could attract a substantial amount of Thai capital—estimated at over US$60 billion currently held offshore—back into the country, according to Merkle Capital.
Merkle, Thailand’s first digital asset fund manager, notes that much of this offshore capital is invested in digital assets through unregulated international platforms. The tax exemption is expected to significantly reshape the investment landscape, emphasized Mana Khanijou, Merkle’s chief commercial officer.
This policy, effective from January 1, 2025, to December 31, 2029, applies to transactions carried out on licensed exchanges, brokers, and dealers within Thailand. Mana Khanijou stated that this bold fiscal incentive not only promotes greater transparency in digital asset trading during peak market conditions but also helps to bring back a portion of the large offshore funds owned by Thai investors.
Historically, the absence of domestic tax advantages and limited regulatory clarity have driven investors toward unlicensed international platforms, placing their capital outside Thailand’s financial oversight. However, with domestic liquidity tightening and the government aiming to boost capital inflows, the tax exemption could serve as an effective tool to encourage wealth repatriation.
If successful, the initiative could support broader economic objectives, particularly as the digital economy is projected to make up over one-third of Thailand’s GDP by 2030. To unlock the full potential of this digital growth, experts suggest Thailand must advance infrastructure, promote digital lifestyle integration, modernize regulations, and continue offering attractive fiscal policies like crypto tax relief.
Competition with neighboring countries pursuing similar strategies is intensifying. To maintain its leadership, Thailand needs to sustain momentum and prioritize innovation in national policies. With committed effort, the country could position itself as Southeast Asia’s leading digital trading hub and a regulatory pioneer.
In related news, InnovestX Securities predicts that Bitcoin and Ethereum prices will remain volatile throughout the month, mainly influenced by macroeconomic and geopolitical events. A key date to watch is August 1, which is the US tariff deadline. If the outcome favors a more dovish or market-friendly stance, crypto prices might rise.
Investors are also advised to monitor the US consumer price index (CPI), an important indicator for the Federal Reserve’s monetary policy. A CPI reading below expectations could boost crypto sentiment by increasing the chances of a rate cut later this year.
Regarding the upcoming Federal Reserve meeting at the end of July, InnovestX expects interest rates to stay unchanged. If this forecast holds, the impact on cryptocurrencies may remain limited.
Lastly, ongoing tensions between Israel and Iran represent a major uncertainty. Worsening conflicts could lead investors to reduce risk exposure and pull back from cryptocurrencies, despite recent signs of improved geopolitical sentiment. The progress of trade negotiations remains another important factor to keep an eye on.
