Enhanced Investment Criteria for Digital Tokens
The Securities and Exchange Commission (SEC) of Thailand recently announced updated criteria for investing in digital tokens, with a focus on easing certain restrictions to foster a more robust investment environment. The SEC Committee approved principles in a meeting held on March 2, 2023, aimed at enhancing investment criteria and related regulations for digital asset business operations. The goal is to establish effective investor protection mechanisms while also considering the risks associated with digital assets. The new criteria come as a result of feedback received on a draft announcement presented in September 2023, which garnered positive responses from stakeholders.
- Inclusion of Real Estate and Infrastructure-Backed ICOs: Previously, retail investors faced limitations on investing in digital tokens backed by real estate or infrastructure operations. However, the commission has now lifted these investment restrictions, allowing broader participation in these sectors.
- Establishment of Custodial Wallet Provider Businesses: The SEC also reviewed criteria for setting up custodial wallet provider businesses, requiring major shareholders to have expertise in safeguarding clients’ financial assets. Compliance with SEC-specified independence criteria is mandatory for these businesses.
Regulation of Bitcoin ETFs and Investment Advisories
The SEC of Thailand has taken a clear stance on spot Bitcoin exchange-traded funds (ETFs), opting not to permit their trading in the country. Citing concerns about the stage of development of foreign-approved Bitcoin ETFs and their alignment with the local market’s needs, the Thai SEC emphasized the importance of cautious decision-making.
“We are monitoring these developments, but currently, there is no plan to permit the establishment of spot Bitcoin ETFs in Thailand,” a representative told the Bangkok Post.
While securities brokerages in Thailand recommend exploring Bitcoin ETFs from the United States, the Thai SEC underscores the need for appropriate investment advice aligning with the available products in Thailand. Bitcoin ETFs offer a convenient avenue for retail and institutional investors to access Bitcoin through traditional brokerage accounts, streamlining the investment process.
The recent approval of Bitcoin ETFs in the United States signifies a significant shift in regulatory outlook, aligning the country with others like Canada, Australia, and Switzerland in embracing this financial product. Remarkably, the US had Bitcoin futures-based ETFs since 2021, showcasing the evolving landscape of cryptocurrency investments across the globe.
In a similar vein, the financial market regulator in South Korea has echoed Thailand’s stance by refraining from allowing the trading of Bitcoin ETFs domestically, reflecting the cautious approach adopted by regulatory bodies worldwide.
