Thailand Puts Crypto ETF Plans Into Full Gear Amid Rising Investor Interest

  • The Thai SEC is planning to release guidelines for crypto ETFs and futures trading early this year.
  • Investors will be permitted to allocate up to 5% of their portfolios into the new asset class.
  • Thai authorities will also tighten oversight on financial influencers and introduce a sandbox for bonds.

Thailand is moving forward towards becoming the main crypto hub in Southeast Asia. 

The country’s SEC is currently drafting new rules to support crypto ETF products and futures trading. If passed, these new rules will give institutional investors a safe way to enter the market. 

Regulatory Framework for the New Crypto ETF

Jomkwan Kongsakul, the deputy secretary-general of the SEC, recently shared that the regulator wants to issue formal guidelines for crypto ETFs early this year. 

The main goal is to make digital assets easier to reach for more investors. The problem used to be that many investors worried about hacking or losing access to their wallets. 

To this end, Thailand’s new regulated fund is expected to remove these barriers.

The SEC board has already approved some of the core aspects of this plan. Right now, they are finalising the specific rules for how these products will operate. 

This includes how companies should handle investments and daily operations. The regulator also plans to treat digital assets as a standard asset class, and under these rules, investors can invest up to 5% of their portfolio.

Trading Futures on the Thailand Futures Exchange

The SEC also wants to enable crypto futures trading. This will happen on the Thailand Futures Exchange (or TFEX) as part of a plan to recognise digital assets under the Derivatives Act. 

The government hopes that by doing this, these assets will get official legal status.

Market makers are expected to be a big part of this new system. The SEC is planning to establish these entities and make sure there is enough liquidity in the market. 

When there is liquidity, prices stabilize and traders can exit or enter positions more freely.

Protecting Investors from Financial Influencers

Regulators are also looking at social media. The SEC is tightening its grip on financial influencers who give investment advice, which means that anyone who recommends specific securities or promises returns must have a license. 

They must also register as an investment advisor or an introducing broker. This step is expected to prevent just anybody with a large following from misleading the public.

Thailand already has a very active retail trading space with Bitkub being the largest exchange in the country. 

It often sees daily trading volumes reach $60 million. However, while people can trade easily, the government still has a ban on using digital coins for daily payments.

Testing in a Regulatory Sandbox

The SEC is collaborating with the Bank of Thailand on this project by building a tokenisation sandbox. This environment allows companies to test bond tokens without facing full regulatory pressure immediately, and the SEC wants to encourage bond issuers to join this sandbox.

This initiative will help the government understand how blockchain technology affects the bond market. It will also allow the SEC to adjust rules before they become permanent law. 

In all, the next few months will be busy for the SEC as they must finish the operational rules and share them with the public. Once the guidelines are out, local firms can start applying to launch their own funds.

Source: https://www.livebitcoinnews.com/thailand-puts-crypto-etf-plans-into-full-gear-amid-rising-investor-interest/