Thailand’s Securities and Exchange Commission (SEC) has revealed a significant initiative to foster innovation in the country’s rapidly growing cryptocurrency sector.
The SEC announced the launch of a new regulatory Sandbox, designed to test and develop real-world crypto services under controlled conditions.
This initiative aims to create a safe environment where new ideas can be explored without posing a risk to the broader financial system.
The SEC first approved the Sandbox in March 2023, following a public consultation that allowed citizens, businesses, and other stakeholders to share their views.
After receiving widespread support, the SEC decided to move forward with the project and establish regulations that define which services can participate.
Six types of crypto-related services are eligible to join the Sandbox: crypto exchanges, crypto brokers, crypto dealers, crypto fund managers, crypto advisors, and custodial wallet providers for crypto assets.
These participants will be carefully assessed on several fronts, including their operational systems, management structures, and financial health. The goal is to ensure that only well-prepared and adequately resourced companies can offer services within the Sandbox.
In the official announcement, the SEC emphasised that participants must clearly define the scope of the services they intend to offer within the Sandbox.
This requirement is meant to reduce risks and prevent any negative impacts during the trial period, which is limited to one year from the date of approval.
Companies interested in joining the Sandbox can now submit their applications.
Thailand’s crypto regulations
Earlier this year, the Thailand SEC also made significant updates to its broader regulatory framework for cryptocurrencies.
These regulations now fall under the Digital Asset Businesses Decree, a legal framework that governs the operation of digital asset businesses in the country.
This updated approach reflects the SEC’s commitment to keeping pace with the evolving crypto landscape.
The new framework places a strong focus on key areas such as Initial Coin Offerings (ICOs), the trading of digital assets, and the sale of cryptocurrencies. Companies that wish to operate in Thailand’s crypto market must now obtain the necessary licences and adhere to the SEC’s rules and guidelines.
One of the most notable changes is the removal of the investment limit for retail investors in crypto assets that are backed by real estate or infrastructure.
Previously, these investors were restricted to a maximum investment of $8,500. This change signals a more open approach by the SEC, allowing greater participation by individual investors in the digital asset market.
In addition to these changes, the SEC has reportedly endorsed the country’s first Bitcoin exchange-traded fund (ETF).
This fund has a policy of investing in 11 global funds, providing Thai investors with broader exposure to the international crypto market.
These developments suggest that Thailand is gradually transitioning towards a more crypto-friendly environment, encouraging both domestic and international players to engage with its market.
Thailand has always been cautious about the use of cryptocurrencies. In April 2023, the country banned the use of cryptocurrencies as a means of payment for goods and services, citing concerns about the stability of its financial system and the wider economy.
In July 2023, the Thailand SEC had also introduced a new set of rules aimed at protecting consumers in the digital asset space. These rules specifically target companies that offer custodial and lending services for cryptocurrencies, imposing strict limitations on their operations.
The SEC has also banned the advertisement and promotion of these services. Any attempt to persuade the public to use deposit-taking and lending services for crypto is now prohibited.
However, despite these regulatory challenges, the adoption of cryptocurrencies continues to grow in Thailand. According to data from Chainalysis, Thailand ranked eighth globally in crypto adoption in 2022, indicating strong interest in digital assets among the Thai population.
