Latest news with #MerkleCapital
Bangkok Post
7 days ago
- Business
- Bangkok Post
Crypto seen benefiting from tax exemption
Thailand's recent move to exempt capital gains tax on cryptocurrency for a five-year period could draw a massive pool of Thai capital estimated at more than US$60 billion currently held offshore back to the country, says Merkle Capital. According to Merkle, Thailand's first digital asset fund manager, much of this capital is spent on digital assets via unregulated international platforms. The capital gains tax exemption is poised to reshape the investment landscape, said Mana Khanijou, chief commercial officer of Merkle Capital. The decision marks a significant step towards strengthening the country's position as a regional digital asset hub, he said. Effective as of Jan 1, 2025 through Dec 31, 2029, this policy applies to transactions conducted through licensed exchanges, brokers and dealers within Thailand. "This bold fiscal incentive not only encourages greater transparency in digital asset trading, especially during peak market conditions, but also lays the groundwork to repatriate a portion of the vast offshore funds held by Thai investors," said Mr Mana. Historically, the lack of a domestic tax advantage and limited regulatory clarity have driven investors toward unlicensed international platforms, placing their capital outside of Thailand's financial oversight, he noted. But with liquidity tightening at home and the government eager to boost capital inflows, the tax exemption serves as a timely magnet for wealth to return to the domestic economy. "If successful, it could directly support broader economic goals, particularly as the digital economy is expected to account for over one-third of Thai GDP by 2030." However, to fully realise its digital potential, Mr Mana said Thailand must push forward on multiple fronts by advancing smart infrastructure, embracing lifestyle digitalisation, modernising regulatory frameworks, and continuing to offer attractive fiscal policies such as crypto tax relief. "Competition is heating up, with neighbouring countries pursuing similar strategies. For Thailand to lead, momentum must be sustained, and innovation must remain central to national policy. With the right commitment, Thailand could emerge not only as a regulatory leader but as Southeast Asia's premier digital trading hub," he said. In a related development, InnovestX Securities forecasts that Bitcoin and Ethereum prices will remain highly volatile throughout this month, driven primarily by macroeconomic and geopolitical developments. A key date to watch is Aug 1 -- the US tariff deadline. "If the outcome signals a more dovish or market-friendly approach, it could provide a lift to crypto prices," said the brokerage. Investors should also monitor the US consumer price index (CPI), a crucial data point used by the Federal Reserve in its monetary policy decisions. If the CPI reading comes in lower than market expectations, it could create positive sentiment for cryptocurrencies, as it may increase the likelihood of a rate cut later this year. For the Fed's meeting at the end of July, InnovestX maintains that the regulator is likely to keep interest rates unchanged. "If this holds true, the impact on crypto prices is expected to be relatively limited," noted the brokerage. "One of the biggest uncertainties remains the escalating conflict between Israel and Iran. Should tensions worsen, there is a chance that investors may reduce their exposure to cryptocurrencies in a risk-off move, despite recent signs of improving sentiment on the geopolitical front. The progress of trade negotiations also remains an important factor to monitor."
Bangkok Post
02-07-2025
- Business
- Bangkok Post
Tax policies, interest rates align for domestic market
Thailand's digital asset market is poised to keep growing as favourable domestic tax policies align with expected cuts in global interest rates, while institutional adoption gains globally. Analysts welcomed the government's recent move to exempt the capital gains tax on digital asset trading, saying it could help position Thailand as a Southeast Asian digital asset hub, especially as macroeconomic and geopolitical uncertainties evolve in the second half of 2025. Woramet Chansen, investment adviser at Merkle Capital, said the US Federal Reserve kept interest rates steady during the first half of the year amid global geopolitical tensions and economic ambiguity. "The Fed's cautious stance signals a balancing act between inflation control and sustainable growth," he said, adding that digital asset investors should monitor whether the global environment is leaning towards a risk-on or risk-off mode. A potential blockade of the Strait of Hormuz, a critical chokepoint for global oil shipments, could trigger a spike in oil prices. That would likely accelerate inflation and force the Fed to delay any interest rate cuts. Meanwhile, US economic data indicates weakening momentum and inflation came in lower than expected, while jobless claims rose, fuelling speculation the Fed may begin cutting rates in September or December. Still, the Fed's latest dot plot projections suggest only modest rate reductions through 2027, reflecting the limited scope of monetary tools available. Should the economy deteriorate further, additional quantitative easing may be required. On the trade front, tensions between the US and China appear to be easing. The 90-day suspension of US tariffs opened the door to further negotiations. This easing of trade friction is seen as a positive signal for global markets, including crypto. However, July and August will be key months to watch, as the grace period for negotiations comes to an end, according to Merkle. "The global environment for digital assets continues to improve. Leading financial institutions such as JPMorgan are developing their own stablecoins, while the recent passage of the Genius Act in the US provides a legal framework for stablecoins, further legitimising their use in mainstream finance," said Mr Woramet. In addition, investment giants such as BlackRock and MicroStrategy have continued to accumulate Bitcoin, even in the absence of Fed rate cuts. "Combined with record-high global money supply, these developments are setting the stage for another new high for Bitcoin in the near future," he said. Mr Woramet said Thailand's tax exemption policy for crypto trading is a powerful signal of the government's intent to develop a globally competitive digital asset ecosystem. The move could not only attract foreign capital, but also enhance the competitiveness of Thai private firms on the global stage. "If additional legal frameworks are introduced such as allowing hedging instruments and crypto derivatives, it could dramatically lift the market's growth potential, emphasising the importance of consistent policy direction regardless of political transitions," he said. G-Tokens backed by government bonds signal greater institutional involvement and regulatory support. These developments enhance market confidence and may pave the way for broader adoption, said Mr Woramet. Investors are advised to exercise caution in this highly volatile asset class. Comprehensive research, disciplined strategies and a deep understanding of individual risk tolerance are essential, noted Merkle.
