KrungSri – FinTech Joined SEC Discuss “Libra” High Impact.
9-7-2019—Yesterday (8 July 2019) at SEC office, SEC held the seminar “Libra The Brave Step of Facebook to New Borderless World”, aim to exchange view and experience among private and public operators, to expand the benefit to the digital asset business and regulation development direction. Over 400 persons and 29,000 Facebook views both from private and public interesting in digital asset circles, attended the seminar.
The participants in the discussion of the seminar consisted of Dr. Phume PhumiRattana, SEC office consultant, Dr. Naran Phophattanachai, Lawyer, Office of the Council of State, Dr. Sumaporn (Srisoonthorn) Manasan, Legal Officer, Professional Fiscal Policy Office, Mr. Thakorn Piyaphan, Chairman of the Krungsri Consumer Group and Executive Director of Digital Banking and Innovation, Bank of Ayudhya,
Mr. Chirayus Supsrisopha Co-Founder and Group CEO, BitCap Capital Group Holdingsand
Ms. Proud Limphongphan Strategic Service Executive Officer Zipmex Company Asia, conducted by
Miss Majaree Supapiroj, SEC Director of Financial Technology Promotion Department.
According to the important issues summarized from the seminar, “Libra” is considered as a global challenge and may be a major turning point for the wide spread use of Crypto Currencies. The relevant government agencies must keep monitor and discuss closely on Libra’s progress, to assess the impact together with appropriate supervision, while private sector see that no one know clearly whether Libra will be last long, but Social Media and Crypto Currency must be last a long time.
Libra’s overview on June 18, 2019, Facebook and the founding members comprised of
28 world-leading companies such as Visa, Master Card, Pay Pal, eBay and Uber have launched the crypto currencies “Libra”, which will be introduced in 2020, to be a widely used digital money that is easily accessible, fast and low-cost, with a stable coin which worth in accordant to the backing by asset, unlike the higher volatility crypto currency like Bitcoin.
In addition, Facebook and its partners established the Libra Association in Switzerland as non-profit alike organization to drive and oversee issues related to Libra, such as Blockchain systems and related property management.
Facebook intends to find approximately 100 co-founding partners to invest at least 10 million US dollars each before the actual service start. By issuing and offering Libra Investment Token (which is not the same coin Libra Crypto-Currency, which will be launched as a mechanism for payment).Facebook also established the company named “Calibra” as a wallet service provider for those who use Libra.
The impact of Libra on Opportunities and challenges; due to there are more than 2 billion Facebook users worldwide, therefore “Libra” should have a wide impact especially for cross-country money transfers between retailer, as the money transfer will be more effective as money can be transfer immediately, like sending a sticker in the application LINE.
Then, the financial sector and the banking sector would be directly affected and have to adjust and find new business models to support, unless they may lose the money transfer business, while E-commerce will become a Social-commerce, that will be transacted via social media. SMEs entrepreneurs will have easier access to global e-commerce, including social banking will replace mobile banking. In addition, other players may compete with Libra, such as Alibaba, Google, Tencent and Amazon.
The impact on the government sector, the public sector may not be able to collect information to determine financial and fiscal policies. Since transactions or activities may not be necessary to go through the entrepreneurs or intermediaries regulated by the government. However, the government should not block or stop innovation, but should study and learn closely to find the best way to manage risk especially systematic risk, as well as to be able to formulate policies to be effectively protect consumers appropriately with Thailand mutual benefit.
In the legal and regulatory context, Libra is a challenge for regulatory agencies around the world who have a rather cautious attitude, although open-minded but still not open without supervision. For Thailand, supervision over Libra using existing laws in the financial sector may be difficult and requires additional consideration that whether Libra is money? Who else can be Libra service provider or authorized reseller? Under the supervision of the relevant law or not? The relevant law are such as; laws relating to financial institution business, currency exchange control, Payment transactions via electronic channels (e-Payment) and may need to be modified or issuing additional laws to support supervision.
While taxation is necessary, there must be a new thinking process of supervising.
The challenge is the taxation of e-commerce that moves to sell products and services on Facebook. By using Libra as a medium for all trades, which may make the Revenue Department will not receive information for supervision.
For supervision under the Digital Asset Business Act 2018, divided into 2 parts as follows: 1.) Issuance and offering of Libra Investment Token (not Libra, which is Crypto Currency.) which, if offered for sale in Thailand, must be request for permission. However, in such cases, there is very little possibility, because those who are able to invest in Libra Investment Token must be a member of the Libra Association, which required very high qualifications for the company that will join and does not allow the general public to invest in Libra Investment Token,
2) Requesting permission to operate intermediaries (Trading center, broker or trader) who shows the intension that will provide Libra trading services in Thailand.
Protection of personal information; The government sector should play a role in supervising to prevent threats to privacy and educating the public to raise awareness of the matter. For Thailand, where applicable personal information laws has been applied. Before the business sector can use the data, it must obtain consent from the user first. Otherwise, there will be an offense under the law
Risks and precautions for people, if there is an impersonate or persuade to invest in the Libra project, it must be fraud, by the reason that the general public cannot access Libra Investment Token, while Libra’s Currency Currencies currently has yet open for service.
