Phuket Crypto Sandbox: Thailand’s Financial Experiment and Future Plans
A Key Moment for Digital Financial Innovation
This report was written by Tiger Research, analyzing Thailand's Phuket crypto sandbox launching in 2025 and examining stablecoins in tourism payments under PM Paetongtarn's leadership.
TL;DR
Thailand will launch its sandbox in Phuket in October 2025 to test digital asset payment payments and shape future policies.
Regulators need to coordinate on testing crypto payments in the sandbox. Private-issued stablecoins emerge as the most feasible option.
Thailand will use this sandbox to boost its competitiveness in the digital economy.
1. Introduction
Competition for dominance in the Asian cryptocurrency market is intensifying. Singapore and Hong Kong are emerging as leaders in Asia's growing cryptocurrency market, supported by their clear regulatory frameworks. While Thailand initially showed promise with strong consumer adoption, its market position has declined since 2023. This decline now threatens Thailand's competitive standing.
This report examines Thailand's planned cryptocurrency sandbox program in Phuket, scheduled to launch in October 2025. The initiative comes as Asian markets prepare for potential regulatory changes, particularly if U.S. policy shifts into a pro-crypto direction under the new Trump administration. Thailand aims to strengthen its position by testing crypto innovations in this popular tourist destination.
2. Phuket Sandbox: Thailand's Digital Asset Initiative
2.1. Background
The Phuket cryptocurrency sandbox will test digital asset payment systems when it launches in October 2025. Through this program, Thailand aims to strengthen its position in the global crypto market. The government will evaluate the initiative's effects on tax collection mechanisms and monetary policy while exploring new economic uses for digital assets.
Former Prime Minister Thaksin Shinawatra initiated this project. He emphasized the need for crypto sandboxes in major tourist destinations like Phuket and Hua Hin at a Pheu Thai Party seminar in December 2024. The Ministry of Finance actively reviewed his proposal. In January 2025, the Deputy Prime Minister and Minister of Finance announced plans to test crypto payments in Phuket within existing legal frameworks.
2.2. Target Assets
Former PM Thaksin and the Finance Minister discussed using cryptocurrencies like Bitcoin. However, regulatory challenges limit this option. The SEC regulates cryptocurrencies as digital assets, and the Bank of Thailand supervises payment systems. This split jurisdiction requires coordination between multiple authorities.
Notably, the Bank of Thailand does not recognize cryptocurrencies for payments, citing price volatility and processing limitations. The governor prefers PromptPay (Bank of Thailand's own QR payment service) over cryptocurrencies due to its efficiency. This stance makes crypto payment adoption unlikely.
The government considers issuing its own stablecoins as another option. The Ministry of Finance plans to issue 10 billion baht worth of government bond-backed stablecoins by October 2025. It will build a secondary trading platform to attract both financial institutions and retail investors. However, the lengthy development and implementation time makes this option less feasible.
Private-issued stablecoins offer the most practical solution. Bitkub, Thailand's leading crypto exchange (CEX), holds 80% market share. The CEX operates its own baht stablecoins on Bitkub Chain and tests them in the Bank of Thailand's programmable payment sandbox. Bitkub's existing infrastructure and KYC systems make rapid implementation possible.
2.3. Target Location
Thailand selected Phuket as the test location for its crypto sandbox. The city attracts over 10 million annual visitors and serves as a hub for tech-savvy digital nomads, providing an ideal environment to test digital asset payments. This setting will allow Thailand to assess real-world applications and strengthen its position as both a tourism and innovation hub.
Tourism is a significant contributor to Thailand's GDP, and the country is adopting policies to attract more foreigners. For example, it expanded visa-free entry from 57 to 93 countries last year. However, tracking and taxing the economic activities of foreigners and digital nomads remains a challenge. The government faces difficulties in monitoring the source of foreign income and managing the flow of funds, particularly when long-term foreign residents rent or sell property.
To address this, the Thai government is exploring the use of traceable digital assets. This initiative aims to capture opaque financial flows and improve the current taxation and regulatory framework. A sandbox will be used to test whether this model is effective in practice.
3. Outlook after Phuket Crypto Sandbox
3.1. Potential to Support Various Cryptocurrency Payments
Private-issued stablecoins remain the most viable payment option for the Phuket Sandbox. If the project demonstrates success, the scope of cryptocurrency payments could extend to a broader range of digital assets.
Thailand has prior experience developing a payment system that instantly converts digital assets to fiat through collaboration with CEXs in 2022. If crypto payments gain official approval, the existing infrastructure could enable rapid scaling.
In November 2024, Siam Commercial Bank (SCB) launched a cryptocurrency payment sandbox. During the DevCon convention, participating merchants enabled instant crypto-to-fiat conversions. SCB 10X's Rubie Wallet project stood out as a key implementation of this model.
As Thailand expands digital asset payment trials, the Phuket Sandbox, set for October this year, is expected to be a major turning point for wider adoption. The Thai government's next policies and market response will be closely monitored.
3.2. Digital Payment Innovation and Policy Implications
The Phuket Cryptocurrency Sandbox is not just a technology experiment; it aims to enhance Thailand’s tourism industry by innovating payment systems with digital assets. The project seeks to address key payment challenges faced by international tourists. Visitors often struggle to track expenses, navigate complex currency exchanges, and manage risks from currency fluctuations. A Web3-based payment system could mitigate these issues by offering a more transparent and seamless transaction experience.
The sandbox will also allow the Thai government to analyze digital asset-based transaction and consumption patterns in detail. This data could inform more refined monetary policies. Additionally, the experiment will help assess the practical viability of digital payment models, shaping future regulatory frameworks and guiding the broader adoption of Web3 technologies.
4. Closing Thoughts
The Phuket Crypto Sandbox aims to strengthen Thailand's digital asset position in ASEAN. As the U.S. advances dollar-backed stablecoin policies, Thailand must boost its financial competitiveness through digital assets. This test will assess how digital assets can improve Thailand's financial system.
Thailand will likely continue pro-crypto policies. Current Prime Minister Paetongtarn Shinawatra, the youngest daughter of pro-crypto former PM Thaksin Shinawatra, will likely support digital asset expansion through broader financial experimentation. This sandbox extends this policy direction.
While Phuket's experiment may expand nationwide, Thailand's position in the evolving digital asset-driven finance deserves attention. Success depends on business-government collaboration, clear regulations, and effective execution. The results will shape Thailand's digital asset policies and applications.
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