Thailand’s Securities and Exchange Commission (SEC) has moved forward with public consultations for a regulated framework that would permit exchange-traded funds (ETFs) based on Bitcoin and E
Thailand’s Securities and Exchange Commission (SEC) has moved forward with public consultations for a regulated framework that would permit exchange-traded funds (ETFs) based on Bitcoin and Ethereum to trade on the Stock Exchange of Thailand. The current draft, released in August, comes after an April consultation period that shaped the regulator’s latest approach, largely supported by industry feedback on custody requirements.
Under the SEC’s phased plan, only Bitcoin and Ethereum qualify for ETF offerings in the initial rollout. These digital asset funds, expected to be managed by licensed asset managers, must operate as passive vehicles solely tracking either Bitcoin or Ethereum and maintain an average net exposure of at least 80% of the fund’s net asset value to the underlying crypto asset throughout each accounting year.
Investor protection lies at the heart of the draft, requiring comprehensive disclosures on the ETF structure, associated risks, and named service providers. This framework aims to boost investor confidence while tightly regulating product design and operational standards.
Funds must be structured as passive vehicles, maintaining at least 80% net exposure to their underlying coin over the course of each accounting year, with strict investor protection and disclosure requirements.
Thailand-based mutual funds and private funds may also participate, gaining access to locally originated spot crypto ETFs under the same investment limits that apply for foreign-issued equivalents. However, the SEC will not approve derivatives or depositary receipts tied to foreign crypto ETFs during the first phase.
AssetEligible for ETFMinimum Net ExposureAllowed on SET*BitcoinYes80%YesEthereumYes80%YesOther Crypto AssetsNoN/ANo*Stock Exchange of Thailand
A notable adjustment in the August draft relates to custody arrangements. The SEC stipulates that domestic digital asset custodians must be the principal holders of crypto ETF assets. However, the regulator retains the authority to approve qualified foreign custodians when necessary, provided they meet strict criteria in their home jurisdictions and satisfy the SEC’s own asset protection standards. These entities can also serve as mutual fund supervisors for crypto ETFs in Thailand.
Any foreign custodian permitted to operate in Thailand must already comply with regulatory frameworks in its home country—subject to oversight from an established authority—and must obtain agreement from the Thai SEC regarding compliance with Thai asset protection protocols.
Mini dictionary: Custody arrangements refer to how client digital assets are stored and who holds responsibility for safeguarding the underlying cryptocurrencies or private keys, which is a crucial aspect for regulatory compliance and risk management of crypto investment products.
The SEC’s ongoing consultations are several steps away from a finalized rulebook. Officials must still review public comments, revise recommendations, and decide on formal authorization before launch dates or final approvals are confirmed. Speaking in January, Deputy Secretary-General Jomkwan Kongsakul stated that crypto ETF products had gained approval in principle as part of broader efforts to reduce hacking and wallet security risks that have deterred some investors from entering the market.
Thailand launched its first spot Bitcoin ETF in June 2024, initially limited to institutional investors. Tax incentives also underpin the sector, with a 0% capital gains rate on cryptocurrency transactions running from January 1, 2025, through December 31, 2029. The SEC views the forthcoming ETF landscape as a crucial channel for moving investor activity from unregulated spaces into tightly monitored, transparent products.
The SEC positions the ETF framework as an additional avenue to direct investor interest toward fully regulated products within the Thai financial system.
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