Key Insights
- Thailand has just launched TouristDigiPay as a crypto payment sandbox for tourists.
- Within this program, visitors can convert crypto into Thai baht for QR code payments.
- TouristDigiPay is expected to alleviate the recent slump in Thai tourism.
Thailand is the latest country to adopt cryptocurrency to spur tourism. However, it’s not exactly a sign of properity. The decision to enable crypto payments for tourist comes amid a downturn in tourist footfall.
The Thai Securities and Exchange Commission (SEC) recently announced the launch of TouristDigiPay.
TouristDigiPay is a new payment sandbox that allows foreign visitors to convert cryptocurrencies into Thai baht.
The initiative will run for 18 months starting in the fourth quarter of the year, and tourists will be able to make crypto transfers directly to merchants.
How TouristDigiPay Works
According to the proposal, while merchants will receive baht directly, direct payments with crypto are off-limits. However, the project allows visitors to use their digital assets when travelling in Thailand.
The program is being developed with support from the Ministry of Finance, the Bank of Thailand (BOT), the Anti-Money Laundering Office (AMLO), and the Ministry of Tourism and Sports.
It combines Thailand’s regulated crypto trading with the existing e-money system managed by the central bank.
Before trading with crypto, Visitors will first need to complete Know Your Customer (KYC) and Customer Due Diligence (CDD) checks.
These requirements, which are enforced by AMLO, are designed to prevent money laundering and ensure that transactions are secure.
Tourists will use licensed e-money accounts to pay for goods and services. Transactions will also be conducted in Thai baht through QR code systems that are used across the country.
There will also be monthly spending limits and restrictions on direct cash withdrawals to reduce risks.
Why Thailand is Turning to Crypto
Tourism is an important part of Thailand’s economy. However, visitor numbers have dwindled over the last year.
The country welcomed 16.8 million tourists in the first half of the year, compared to 17.7 million in the same period of the previous year.
The biggest drop came from China, which is historically one of Thailand’s largest sources of visitors.
Chinese tourist arrivals also plunged by around 34%, while the East Asian market saw a 24% decline.
At the same time, countries like Japan and Vietnam have become more attractive, thanks to cheaper currencies and better travel costs.
Officials hope that the new TouristDigiPay initiative will make Thailand more competitive by appealing to crypto-savvy travellers.
The country is making spending more flexible, and is attempting to improve the visitor experience while encouraging them to spend.
What Are Some of the Issues?
While the system can be massive for the Thai economy if approved, it comes with its share of issues.
For example, tourists must first deal with KYC and AML procedures, which may be difficult for those seeking convenience.
Additionally, the TouristDigiPay initiative also imposes spending caps, ranging from 50,000 to 500,000 baht monthly (depending on merchant type).
This could prove difficult to handle for high-spending visitors.
Moreover, the ban on direct crypto payments might deter some users who prefer spending crypto without conversion.
Finally, tourists who are unfamiliar with digital wallets or QR-based systems may also struggle with onboarding.
Lessons From Other Countries
Thailand is not the only country in Asia or the rest of the world that has attempted to integrate crypto with tourism.
Bhutan, for example, earlier, partnered with Binance Pay to let visitors pay using crypto. El Salvador, which adopted Bitcoin as legal tender, saw an uptick in crypto tourism immediately after its embrace of the cryptocurrency.
Finally, the United Arab Emirates also partnered with Crypto(dot)com to allow passengers to pay for flights and in-flight buys with crypto. These examples show that there are opportunities in crypto-based travel, and also pitfalls.
Deputy Prime Minister and Finance Minister Pichai Chunhavajira will provide even more details about the TouristDigiPay program soon. However, the rollout is expected to start in major tourist hubs before expanding.
Overall, if Thailand can balance regulation and convenience properly, TouristDigiPay could make a difference in how tourists experience spending within the country.
