By September 2021, all crypto transactions were deemed illegal by the Chinese government, thus shutting down all operations nationwide. However, the neighbouring Asian country, Thailand, took a different approach and boosted its crypto-mining operations.
Thai entrepreneurs including Pongsakorn Tongtaveenan took this as an opportunity to buy and sell redundant computer processors from crypto companies in China. These components were shipped to the Southeast Asian country.
According to the entrepreneurs, the hardware needed to solve complex mathematical problems drastically dropped in price amidst the crackdown.
‘Chinese miners got rid of their machines and the price collapsed by 30 per cent’, Pongsakorn said to Al Jazeera.
Amidst the crackdown, many mining operations sought out new bases in countries with friendlier regulations for digital assets. Some shifted their operations to the United States while others went to Malaysia, Russia and Kazakhstan.
However, smaller miners opted to cut their losses in fear of China’s government. These mining gears were then sold thus giving opportunities to Thai entrepreneurs like Pongsakorn to take advantage of the circumstances.
The entrepreneur managed to sell hundreds of units in the country as neophyte Thai crypto miners started capitalising on the turn of events last September. He transported the crypto mining systems, especially the Bitmain Antminer SJ19 Pro from China.
‘There’s around 100,000 Thai miners now,’ said Pongsakorn.
This increasing popularity for retail crypto mining in the country was triggered by people who are looking for a more stable income as the world is plagued by the pandemic, according to the entrepreneur.
He also believes that investors are getting more optimistic about the future of digital assets amidst the mainstream adoption of Bitcoin and other cryptocurrencies as payments for goods and services.
‘Bitcoin is the gold of the digital world. But a mining rig is like gold mining stocks—you’re paid dividends according to the gold price,’ he added.
According to an unnamed source reported by Aljazeera, a miner could initially set up a mining rig for around US$30,000 and recoup all the capital in just three months.
With the successful turnover of crypto activities in the country, Thai authorities are now considering enacting new rules for the rising industry.
‘We want to ensure that we strike the right balance between allowing financial innovation and managing risks’, Bank of Thailand (BoT) Governor Sethaput Suthiwartnareput said to Bangkok Post during an interview.
The central bank is working closely with the country’s Securities and Exchange Commission and finance ministry to draft the regulations specifically for the crypto industry. Sethaput also stressed that even with the potential of digital assets as investment, their volatility can still put the financial system at risk.
These new rules will provide adequate safeguards for consumers as well as future financial securities amidst the mainstream boom of crypto, according to the BoT governor.
Aside from the China crypto ban, the rising crypto transactions were brought about by the booming mainstream adoption of the country. Local Thai crypto exchanges surged from US$538 million in 2020 to US$6.6 million by the end of 2021.
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