Thailand Finalizes Virtual Asset Travel Rule

We discussed the investment direction of the virtual asset market with Professor Jung Ji-yeol of Hanyang University. While the New York stock market was closed, we analyzed the Bitcoin market conditions during the live broadcast. Recently, it surpassed the $81,000 mark but is currently moving around $80,000, showing an unfavorable trend. Bitcoin's current trend can be summarized as a stage of digesting selling pressure at the top, accumulated due to short-term rapid gains after a 38% rise from its July low. Buyers and sellers are in a tense standoff around the $80,000 mark.

Currently, Bitcoin is stable at around $79,500. A large volume of spot selling orders is densely accumulated near $81,000, acting as the most significant barrier to upward movement. Due to the burden of this volume, a tug-of-war to break through it is expected to continue for some time. However, abundant liquidity, with a current global market capitalization of $2.7 trillion, or approximately 3,600 trillion won, is solidly supporting the downside.

The Fear & Greed Index, indicating investment sentiment, remains at 73 points, signifying a strong state of greed. The energy from demand to digest the $81,000 sell wall is still strong. While abundant liquidity supports the downside, the key is whether the sell wall at $81,000 will be broken. Ethereum, the leader among altcoins, has also entered an ideal trajectory with improved supply and demand conditions. Currently, Ethereum is trading at around $2,490, having perfectly settled above the psychological resistance level of $2,400 and approaching $2,500.

Currently, Ethereum's daily trading volume is actively circulating at $12.15 billion. As Bitcoin forms a support price at the top, investor confidence and institutional funds are steadily flowing into the broader smart contract ecosystem, particularly centered around Ethereum. This suggests that investor confidence and institutional funds are robustly maintained.

Amid tightening global regulatory frameworks, news has emerged from Thailand, a Southeast Asian virtual asset hub, about a complete ban on personal wallet anonymity. The Thai Securities and Exchange Commission (SEC) officially announced the final version of the virtual asset travel rule, mandating real-name verification for personal wallets in self-custody. This law will officially take effect on February 27, 2027. The core criterion for the regulation is 30,000 baht, which is approximately 1.1 million Korean won.

The core of this measure is 30,000 baht (approximately 1.1 million won). First, exchanges must unconditionally verify the identity of the recipient for all external transfers, regardless of the amount. Even a transfer of just 10,000 won will have anonymity completely blocked. Second, for transfers exceeding 30,000 baht, detailed recipient address information, and even corporate registration numbers for businesses, must be submitted to the counterparty exchange. Third, there is the controversial personal wallet regulation. When sending more than 30,000 baht to a personal wallet like Metamask or Ledger from an exchange, the deposit will only be processed if it is technically proven that the wallet genuinely belongs to the sender through a signature message or a small transfer. Exchanges in Thailand will have their operating licenses revoked if they fail to implement this system by February 27, 2027. Since anonymous transfers will be completely blocked, exchanges must move quickly.

The real target of the urgent and strong regulation by Thai authorities is the dollar stablecoin, Tether (USDT). Currently, the Thai SEC, in conjunction with the central bank, is meticulously auditing the illicit flow of USDT, which is used as a bypass for tax evasion in the underground economy. The intention is to completely block the distribution of illegal funds exploiting Tether by restricting personal wallet deposits and withdrawals through the travel rule. While unreported personal transactions are blocked, a policy is also being pursued to completely reduce personal income tax to 0% for virtual asset investment profits obtained through legitimate exchanges. Furthermore, they are swiftly pushing for the official approval of Bitcoin and Ethereum spot ETFs, employing a sophisticated dual strategy to encourage formal entry into the safe institutional framework. It is regrettable that even Thailand uses a strategy of both carrots and sticks, whereas Korea only focuses on regulation and taxation.

Amid ongoing efforts by authorities to precisely monitor unauthorized flows using Tether and prevent underground movements, news from the domestic market is also gaining attention. This involves the prospect of stock, bond, real estate, and art fractional investments being conducted and settled on the blockchain. The Financial Services Commission is pursuing a three-stage development roadmap for tokenized securities to digitize Korea's traditional capital market system. This master plan aims to transfer the entire capital market to an on-chain, or blockchain, ecosystem by February 2027, coinciding with the effectiveness of related financial amendments.

Let's look at the three-stage blueprint roadmap presented by the Financial Services Commission. First, Phase 1 begins with the enforcement of the law in February 2022. Corporate bonds, private equity funds, and fractional investment products like real estate and art will be officially launched in the market under the banner of tokenized securities. Phase 2 involves expanding the scope. As the trends from Phase 1 are monitored and stability is proven, the scope of tokenization will be significantly broadened to include public stocks and general funds subscribed by individual investors. Finally, Phase 3 will see the most crucial settlement innovation. This involves not only changing the form of products but also integrating Korean won stablecoins or the Bank of Korea's CBDC to complete a perfect on-chain settlement network where settlement is concluded in real-time as soon as tokens are purchased. In essence, products will be issued in tokenized security forms, infrastructure will be expanded, and the process will eventually reach its final stage.

When this three-stage process is completed, investors and market participants will experience tangible benefits. The biggest change will be the complete elimination of the settlement time lag, which currently takes two days for cash from stock sales to enter a bank account. Since stock deposits and fund withdrawals will occur simultaneously through smart contracts, a 0-second settlement lag will be realized. This means a dramatic acceleration in capital turnover speed. Mooster Consulting Group highly projects the Korean STO market, formed through this innovation, to reach an impressive 367 trillion won by 2030. A 0-second settlement lag ultimately means an enormous increase in capital turnover speed and the complete elimination of that time difference.

In line with these trends, domestic financial institutions are continuously forming alliances and expanding their infrastructure. The convergence of large financial companies and big tech firms is already well underway. This can be viewed in three main categories. First, the Koscom camp: 12 securities firms, including Kiwoom Securities and Hyundai Motor Securities, are collaborating to accelerate the construction of a common standard platform called 'KoSTO'. Next, there's the alliance of ultra-large financial companies and big tech. Mirae Asset Securities has partnered with SK Telecom and Hana Securities to operate the 'NFI (Next Finance Initiative)' alliance. Korea Investment & Securities has joined forces with KakaoBank and Toss Bank to form the 'ST (Security Token) Friends' lineup.

The integration of global engines is also noteworthy. Shinhan Asset Management is developing a national bond tokenization fund with Solana, a major global chain, and Avalanche is also deeply involved as a core engine in the platforms of domestic financial companies and the development of Korean won stablecoins. Alongside financial innovation, safeguards for consumer protection are also crucial. To prevent speculative overheating and protect consumers, financial authorities have tightly capped individual fractional investment public subscription limits to 30 million won per person annually or 5% of the issuance amount, whichever is smaller. Additionally, the limit for individuals to trade on authorized small over-the-counter exchanges has been set at a total of 100 million won annually, preemptively preventing rapid market overheating. As virtual assets are in a transitional period, combining with institutional finance to settle as transparent assets, investor attention is warranted.