As opposition to the proposed legislation grew, Thailand's finance ministry abandoned its plans to tax income generated by cryptocurrency transactions.

According to The Financial Times, an anonymous source within the Finance Ministry is backing down on plans to impose a 15% withholding tax on taxpayers who profit from cryptocurrencies. Mining operations and income from various investment products were also intended to be taxed.

According to a Financial Times report, Thailand's military-backed government will instead allow traders to offset annual losses against gains made in the same year. Meanwhile, cryptocurrency exchanges and other digital asset platforms that facilitate crypto transactions are exempt from capital gains tax.

"The revenue department did extensive research and reached out to crypto operators for feedback." It is much more welcoming to both investors and the industry," said Pete Peeradej Tanruangporn, CEO of cryptocurrency exchange Upbit, to the publication.

Although no specific taxation standards for crypto assets have been established, the finance ministry is said to be considering reclassifying cryptocurrency returns as a type of "taxable income."

Thailand is taking steps towards cryptocurrency adoption.

The Southeast Asian country has already taken steps towards cryptocurrency adoption, establishing regulations and guidelines to welcome the business and opportunities that blockchain brings. It has also issued improvement orders for Bitkub and other Thai cryptocurrency exchanges after users were prevented from trading during significant price increases in 2021.

Last year, Thailand's securities and exchange commission issued a slew of new regulations for crypto businesses, some of which sparked public outrage. It recently proposed new guidelines for the custody of digital assets held by cryptocurrency operators.

The current rules already require crypto exchanges to share user information with regulators whenever funds are transferred between firms, in order to keep a growing number of illicit activities hidden behind the global cryptocurrency industry.

Earlier in 2021, crypto fund managers and investment advisers were required to apply for a licence in order to continue operating. Previously, money managers who traded assets that did not fall under the legal definition of securities, futures contracts, or equivalent financial instruments were not subject to SEC oversight. Investors in cryptocurrency funds managed by unregulated portfolio managers were also not protected by investor compensation funds.

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