The Securities and Exchange Commission (SEC) of Thailand has opened a public consultation period running through September 20 for a proposed crypto ETF framework. The consultations are at least two steps away from being finalized as a formal rulebook, as the regulator must still collect comments, revise recommendations, and decide whether to authorize the products. No final approval or launch date has been confirmed.
The August draft follows an earlier consultation in April, where feedback primarily supporting the regulator's plan on custody arrangements helped officials adjust parts of the original design.
Focus on Bitcoin and Ethereum
In the first phase of the design plan, only Bitcoin and Ethereum clear the bar. These funds will trade exclusively on the Stock Exchange of Thailand.
The draft requires licensed asset managers to operate each fund as a passive vehicle tracking the price of a single crypto asset. Funds must also maintain an average net exposure of at least 80% of their net asset value to the underlying coin in each accounting year. Investor protection stipulations require disclosures on fund structure, risks, and service providers.
Under the draft, Thai mutual funds and private funds will be permitted to buy locally domiciled crypto ETFs alongside the foreign-issued ETFs they are already authorized to hold, subject to current investment limits. However, alternative instruments tied to overseas crypto ETFs, such as depositary receipts, will not be green-lighted during the initial phase.
Custody Requirements and Policy Context
The August draft maintains domestic digital asset custodians as the primary location for crypto ETFs, marking an update from the April discussions. The regulator retains discretion to permit qualified foreign custodians when necessary, provided they are cleared in their home jurisdictions, operate under a regulator with real legal authority, and meet the Thai SEC's asset protection standards.
The consultation builds upon previous regulatory efforts, including a January statement from deputy secretary-general Jomkwan Kongsakul indicating that crypto ETFs had won approval in principle to help mitigate hacking and wallet-security concerns. Thailand previously cleared its first spot Bitcoin ETF for institutional investors in June 2024.
The regulatory push coincides with existing tax policy, including a 0% capital gains tax rate on crypto running from January 1, 2025, through December 31, 2029. The SEC views the ETF framework as an additional channel to direct investor demand into regulated products.
