Today, Reuters reported that Thailand’s cabinet has agreed to tax breaks for companies issuing investment tokens. Taxes include Corporation Tax and Value Added Tax. Thailand distinguishes between many types of tokens, so the main beneficiaries of this tax break are likely to be property developers for real estate tokenization.

Deputy government spokesperson Rachada Dhnadirek estimated that over the next two years, there will be 128 billion baht ($3.6 billion) worth of investment token offerings in Thailand, resulting in a loss of tax revenue of 35 billion baht ($1 billion).

Investment tokens are a limited class of digital assets and do not include tokenized securities that are regulated alongside conventional securities. It also excludes utility tokens and cryptocurrencies that do not grant property rights.

So what is an investment token? It has to grant rights to the investor in a project or business, but not be a guarantee. The most common category is likely to be real estate, and the Securities and Exchange Commission (SEC) has published specific regulations for this asset class.

The SEC has granted licenses to several companies involved in cryptocurrencies or digital tokens. So far, it has approved only three purely digital token exchanges (utility and investment tokens), with only one active. Two of them mainly offer real estate tokens. The third is TDX, the digital asset subsidiary of the Stock Exchange of Thailand (SET), which has yet to launch its exchange.

Last year, the SEC and other government departments ruled that cryptocurrencies could not be used as a means of payment. SCBX, the holding company of Siam Commercial Bank, had planned to acquire Bitkub, Thailand’s largest cryptocurrency exchange, but the deal was terminated as a result of the SEC requiring the exchange to address some regulatory issues.