In order to facilitate the creation of new possibilities in the cryptocurrency market, the securities regulator of Thailand plans to make it possible for mutual funds and private funds to engage in cryptocurrency trading.
According to an article that was published in the Bangkok Post not too long ago, this action is a component of a bigger effort to enhance the crypto economy of the nation.
The proposal, which was presented by the Securities and Exchange Commission (SEC) of Thailand on October 9, would make it possible for funds to participate in cryptocurrency exchange-traded funds (ETFs) and investment tokens that are listed on stock exchanges in the United States. This has the potential to lead to the development of a greater variety of financial products that are connected to digital assets.
"The funds that are offered to institutional and ultra-high-net-worth investors who have a high risk tolerance will be permitted to invest in cryptocurrency exchange-traded funds (ETFs) with no investment limit," the statement reads. In addition, the release said that "investment tokens come with key risks and characteristics that are comparable to those of traditional securities, such as debt securities." It is for this reason that the funds will be permitted to invest in investment tokens, provided that they are subject to the existing investment restrictions of conventional securities, which include the single entity limit, the group limit, and the concentration limit.
As described by Anek Yooyuen, the deputy secretary-general of the assets and Exchange Commission (SEC), investment tokens would be considered in the same manner as conventional assets such as stocks and bonds. The purpose of this development is to make it possible for asset managers and securities companies to provide products associated to cryptocurrencies, particularly to big investors. On the other hand, retail mutual funds would be subject to a 15% limit on their exposure to cryptocurrency, whilst institutional investors and high-net-worth investors would not be subject to any such restrictions.
In order to accommodate funds that are operating in digital assets, the Securities and Exchange Commission (SEC) plans to amend the regulations that govern asset custody and information disclosure. The fact that these modifications would take place later on in this year was stressed by Yooyuen.
In addition, the commission plans to implement many regulatory frameworks, each of which will be determined by the risk profile of the digital assets. In contrast to stablecoins, which may be subject to different rules, high-risk assets like as Bitcoin and Ethereum will be subject to stricter controls.
The SEC is presently soliciting feedback from the general public about the plan, and the consultation process will remain available until November 8, 2024. During this time, the commission is also investigating the prospect of enabling initial coin offering (ICO) portals to outsource duties such as fundraising or project design. However, before to any changes of this kind being completed, a public hearing will be conducted.
The Securities and Exchange Commission is increasing supervision while these efforts are creating new possibilities. Infractions such as naked short selling and market manipulation are going to be subject to more stringent punishments, says the organization. It is possible that the current fine of one million baht might be doubled to three million baht for securities companies that issue trading instructions that are deemed to be unsuitable. Companies that are proven to be responsible for serious violations may have their licenses revoked.
There has been a determined effort being made in Thailand to establish an atmosphere that is more welcoming to cryptocurrency. In an effort to increase the country's level of competitiveness, the government granted a tax exemption on revenues from cryptocurrency transactions earlier this year.
A Digital Asset Regulatory Sandbox was developed by the Securities and Exchange Commission (SEC) in the month of August. This sandbox gave 10 private businesses the opportunity to conduct trials of exchanging digital tokens and cryptocurrency for Thai baht. This laid the basis for the use of cryptocurrencies as a payment mechanism.
According to Chainalysis's "2023 Global Cryptocurrency Adoption Index," Thailand is now ranked tenth in terms of the number of civilians who have adopted cryptocurrencies. Based on the findings of the Global 2022 Digital Overview Report, Thailand has one of the highest percentages of cryptocurrency ownership among internet users all over the world.
Additionally, as of the 11th of January in the year 2024, there were 13.02 million people in Thailand who were using cryptocurrencies, as stated by the statistics provided by Statista.com. It is estimated that this constitutes around 18.1% of the total population of the nation. Following a period of 10 years of consistent growth, it is expected that there would be 17.67 million users by the year 2028.
Despite the fact that the Bank of Thailand continues to restrict payments made using cryptocurrencies, the Securities and Exchange Commission (SEC) is expected to engage in more conversations with the central bank about the matter. In the meanwhile, the regulator is continuing to shut down unlicensed platforms in order to safeguard Thai investors from businesses that are not permitted to deal in cryptocurrencies.
