Thailand is moving closer to bringing spot Bitcoin and Ether exchange-traded funds (ETFs) to its local stock market as regulators push forward with a new digital-asset framework.
The Securities and Exchange Commission (SEC) of Thailand has advanced its plans from proposed principles to draft regulations, marking another step in the country’s effort to strengthen its position as a global digital-asset hub for institutional investors.
The regulator announced that it is seeking public feedback on two consultation papers.
The first outlines draft regulations for crypto ETFs listed in Thailand, while the second focuses on rules for foreign digital-asset custodians that may serve mutual and private funds investing in digital assets.
The development follows an earlier consultation in April, when the SEC asked market participants for their views on the broader framework.
According to the regulator, most respondents supported the proposed framework but raised concerns about custody arrangements. These concerns led the SEC to revise its approach to how digital assets should be held and protected.
BTC and ETH Set for the First Phase
Under the proposed rules, Bitcoin (BTC) and Ether (ETC) would be the only cryptocurrencies eligible for ETFs during the initial phase. Asset managers would be allowed to establish passive ETFs designed to track the performance of ether digital assets.
The proposed ETFs would trade exclusively on the Stock Exchange of Thailand (SET). Each ETF would be required to track only one crypto asset and maintain an average net exposure of at least 80% of its net asset value to that asset throughout each accounting year.
The framework could also expand investment opportunities for Thai funds. Mutual funds and private funds would be allowed to invest in Thai-domiciled crypto ETFs, in addition to certain foreign crypto ETFs that they are already permitted to access under existing investment rules.
However, the SEC plans to keep the initial framework relatively limited. Alternative products linked to foreign crypto ETFs, including depositary receipts that track those products, would not be permitted during the first phase.
SEC Tightens Focus on Crypto Custody
Custody remains an important part of Thailand’s proposed crypto ETF framework.
Under the revised approach, ETFs would primarily be required to use digital-asset custodians based in Thailand.
The SEC said, “Under the revised approach, crypto ETFs will continue to be primarily required to use onshore DA [digital asset] custodians, while the SEC may permit the use of qualified foreign DA custodians when necessary and appropriate in light of prevailing circumstances.”
Separately, foreign custodians serving Thai mutual and private funds would need to be supervised by a regulatory authority with appropriate legal powers. They would also have to meet regulatory and investor-asset protection standards considered adequate by the Thai SEC.
The regulator will accept public comments on both consultation papers until September 20, giving market participants an opportunity to provide further feedback before the rules move closer to implementation.
