Thailand Progresses Bitcoin and Ether ETF Regulation

Thailand’s Securities and Exchange Commission (SEC) has moved its plans for locally listed spot Bitcoin and Ether exchange-traded funds (ETFs) from general policy principles to draft regulations, while also revising its proposed rules for foreign digital asset custodians.

The regulator said on Monday that it is seeking public feedback on two consultation papers. One sets out draft rules for Thai crypto ETFs, while the other outlines proposed requirements for foreign digital asset custodians used by mutual and private funds investing in digital assets. During the initial phase, asset managers would be allowed to launch passive ETFs tracking only Bitcoin (BTC) or Ether (ETH).

The draft regulations follow an earlier consultation in April covering the broader framework. The SEC said most respondents supported the proposal, although feedback around custody arrangements prompted changes to its approach.

Bitcoin and Ether ETFs would trade on the SET

Under the proposed framework, spot Bitcoin and Ether ETFs would be listed exclusively on the Stock Exchange of Thailand (SET). Each fund would track a single cryptocurrency and would be required to maintain average net exposure of at least 80% of its net asset value to that asset over each accounting year.

The rules would also allow Thai mutual funds and private funds to invest in domestically listed crypto ETFs, in addition to foreign crypto ETFs they are already permitted to access, subject to existing investment restrictions. During the first phase, however, products linked indirectly to foreign crypto ETFs, such as depositary receipts, would not be permitted.

Thailand revises digital asset custody rules

The SEC’s revised framework would continue to prioritize locally based digital asset custodians for Thai crypto ETFs during the initial rollout. “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,” the SEC said.

Under the separate custody proposal, foreign custodians serving mutual and private funds investing in digital assets would need to operate under the supervision of a recognized regulatory authority with legal enforcement powers. They would also be required to meet regulatory and investor asset protection standards considered sufficient by Thailand’s SEC.

Thailand continues push to necome a digital asset hub

The proposed rules form part of Thailand’s broader effort to strengthen its position as an institutional digital asset hub. By introducing regulated local crypto ETFs and clearer custody standards, the SEC is seeking to expand access to digital assets while maintaining investor safeguards and regulatory oversight.

Public comments on both consultation papers will be accepted until Sept. 20.

Sources:

https://cointelegraph.com/news/thailand-bitcoin-ether-etfs-draft-rules

https://www.sec.or.th/EN/Pages/News_Detail.aspx?SECID=13237