The Thai Securities and Exchange Commission has proposed to allow investment funds to access the cryptocurrency market, opening up opportunities for institutional capital to flow into this field, while tightening management to protect investors.
On October 9, the Thai Securities and Exchange Commission (SEC) has announced a proposal to allow investment funds and private funds to invest in cryptocurrency products, in order to meet the growing demand from institutional investors. This move is seen as an important step in legalizing and promoting the cryptocurrency market in Thailand, a country with an active retail cryptocurrency trading community with a daily trading volume of nearly $30 million on the Bitkub exchange.
According to the proposal, funds will be allowed to invest in cryptocurrency exchange-traded funds (ETFs) listed on US stock exchanges. This will open the door for securities companies and asset management firms to provide cryptocurrency-related products to large investors, creating an attractive new investment channel and diversifying investment portfolios.
The Thai SEC is well aware of the potential risks of the cryptocurrency market, and therefore has proposed specific regulations for each type of asset. Investment tokens will be classified together with stocks and bonds, while Bitcoin and stablecoins will be classified separately due to their different risk levels.
To control risks, the SEC imposes a 15% allocation limit for retail investment funds in cryptocurrency investments. However, institutional investors and high-net-worth individuals will not be subject to this access limit.
At the same time, the SEC will also review the management criteria for funds investing in cryptocurrency assets, including asset custody, valuation, information disclosure, and advertising. The goal is to ensure transparency and safety for investment activities, and protect the interests of investors.
Strengthening Management and Expanding Experimentation
In addition to opening up to institutional investment, the SEC also proposes to strengthen market management, especially in terms of violations. The agency plans to increase penalties for unsupported short-selling, companies sending inappropriate trading orders, and market manipulation. Earlier this year, the SEC had already blocked unlicensed cryptocurrency exchanges operating in Thailand.
Alongside tightening management, the SEC is also preparing a legal sandbox for digital assets, allowing 10 private companies to conduct experimental projects on exchanging cryptocurrency for local currency. This is an important step towards legalizing cryptocurrency payments in Thailand, an activity currently prohibited by the Bank of Thailand.
However, the use of cryptocurrency as a means of payment still needs to be discussed and approved by the SEC and the Bank of Thailand. If approved, this would be a major breakthrough, opening up opportunities for the development of the cryptocurrency market and promoting the application of blockchain technology in payments in Thailand.
