To boost their respective financial businesses, the financial technology associations of the two countries have signed an agreement to cooperate on technology, including blockchain.
Why work together?
A bilateral Memorandum of Understanding (MOU) has been signed by Thailand’s and Hungary’s financial technology organizations to facilitate the use of blockchain technology in their respective financial sectors. According to a post by the Hungarian Embassy in Bangkok (1), the MOU between the Thai Fintech Association (TFA) and the Hungarian Blockchain Coalition would allow the two organizations to “exchange experiences, best practices, and investigate areas potentially useful for direct cooperation.”
E-commerce, mobile payments, and digital currencies are all expanding quickly in Thailand, according to TFA President Chonladet Khemarattana, who also noted the need for international cooperation to advance local financial technology. Additionally, he stated that 20% of the world’s cryptocurrency holders reside in Thailand, ranked ninth in the 2022 Global Crypto Adoption Index issued in September by analytics company Chainalysis and cryptocurrency payments business TripleA.
Where would the research be done?
The National Data and Economy Knowledge Center and the Ministry of Innovation and Technology of Hungary jointly established the Hungarian Blockchain Coalition in March 2022, while the Thai Fintech Association was established as a non-profit in 2016 to represent the local financial technology sector, including cryptocurrency exchanges.
The agreement was reached at the same time as Thailand’s central bank. A few of its commercial banks participated in a cross-border wholesale central bank digital currency (CBDC) transaction platform testing project utilizing distributed ledger technology in September. In addition, the Bank of Thailand stated in August (2) that it intended to launch a trial program for a retail CBDC by the end of 2022 on a small scale in the private sector with about 10,000 customers. Using “cash-like actions,” such as making purchases of products or services, would be used to test the digital currency.
Thailand’s Securities and Exchange Commission (SEC) (2) has also imposed certain limits on cryptocurrencies this year, forbidding their usage as payment methods in March because they “may impair the stability of the financial system.” The SEC plans to ban cryptocurrency exchanges from offering or supporting services for storing digital assets, which is another way the authority is tightening down on crypto lending platforms.
In February, György Matolcsy, the governor of the Hungarian National Bank, called for a blanket ban on all cryptocurrency trading and mining across the European Union, claiming that it “serviced illegal activities” and was “speculative.” This indicates that Hungary takes a similarly tough stance on cryptocurrencies.