The Thai government has approved a new proposal that paves the way for the use of digital assets and cryptocurrencies in the country’s regulated financial markets. With this step, digital assets have the opportunity to gradually strengthen the country’s place in the capital markets, especially derivative products.
Digital Assets in Capital Markets
The Securities and Exchange Commission (SEC), which is responsible for the supervision of Thai capital markets, aims to accept cryptocurrencies and tokens as underlying assets in derivative contracts with the amendments to the Digital Assets Trading Act. When this change comes into effect, licensed companies in the country will be able to offer products such as futures and options based on cryptocurrencies.
Details and Justifications of the New Regulations
Nirun Fuwattanukul, CEO of Binance Thailand, stated that the step taken is extremely decisive for the country’s vision of becoming a leader in the digital economy. SEC Secretary General Pornanong Budsaratragoon stated that the regulation will ensure wider acceptance of crypto assets as an alternative asset class and offer investors the opportunity for portfolio diversification and risk management.
The regulatory body has begun the process of updating the existing law and preparing the specific principles and framework to be applied in derivatives markets. This framework will include specific licensing conditions and oversight rules for brokers, exchanges and clearing organizations offering crypto-based derivatives products. In cooperation with the Thailand Futures Exchange (TFEX), new types of futures contracts are being developed to suit the risk and market needs of digital assets.
The regulations to be made include not only crypto assets but also carbon credits in the “goods” category. Thus, markets that enable physical delivery in carbon credit futures will be created. This step offers a secondary benefit towards Thailand’s climate change mitigation and carbon neutrality goals.
Thailand’s Bitcoin ETF Move
Thailand’s capital market board has developed a comprehensive regulatory structure that allows Bitcoin and other crypto assets to reach investors in the country through exchange-traded funds (ETFs). With the new legislation, the legal basis has been prepared for crypto-based ETFs, futures and tokenization-based investment products.
While the SEC has approved the basic principles of crypto ETFs, it has also begun to establish operational rules in areas such as custody, liquidity management and cooperation between asset managers and licensed exchanges.
In this new era, which allows investors to allocate 4 to 5 percent of their portfolios to digital assets, it is aimed to trade local ETFs on the Thai Stock Exchange and provide safe access through the exchange instead of direct crypto purchases. In the country where the first direct Bitcoin ETF was approved in 2024, it is also planned to increase diversification with ether and basket products.
