Thailand Sets Rules for Domestic Bitcoin, Ethereum ETFs, Limits Foreign Access

Thailand Establishes Framework for Domestic Crypto ETFs

Thailand’s Securities and Exchange Commission (SEC) announced on October 8th that 11 regulatory notifications will take effect on October 16th, creating a framework for Bitcoin and Ethereum exchange-traded funds listed on the Stock Exchange of Thailand. This follows the success of spot Bitcoin and Ethereum ETFs in the United States, which have seen approximately $70.37 billion in cumulative net inflows since launch.

Prioritizing Domestic Funds

The new regulations initially prohibit the issuance and offering of investment products linked to foreign crypto ETFs, including depositary receipts. Securities companies are also restricted from facilitating investments in foreign crypto ETFs for retail investors, only allowing access for institutional or ultra-high-net-worth clients. The SEC stated this approach supports the development of Thailand’s domestic crypto ETF ecosystem and strengthens local financial institutions.

Investor Safeguards and Restrictions

Beyond limiting foreign competition, the framework includes safeguards. ETFs will be limited to passively tracking either Bitcoin or Ethereum, with a minimum 80% net exposure to the underlying asset. Margin loans for ETF purchases are prohibited, and investors must receive education on risks and acknowledge understanding before trading. Thai mutual funds can now invest in Thai-listed crypto ETFs, a change from previous restrictions. As of October 12th, combined net assets of Bitcoin and Ethereum ETFs globally totaled approximately $121 billion, according to SoSoValue data.

The SEC conducted consultations between April and September, with most respondents supporting the proposed regulations. While the framework is now effective, no Bitcoin or Ethereum ETFs have yet been approved for trading on the Thai stock exchange.

Source: CryptoSlate