Thailand approves new cryptocurrency ETF regulation! Institutions can allocate 5%, and futures trading is simultaneously opened.

Deputy Secretary-General of the Thai Securities and Exchange Commission Jomkwan Kongsakul stated that cryptocurrency ETF guidelines will be released at the beginning of this year, allowing investors to allocate up to 5% to digital assets. Thailand will permit crypto futures trading, liquidity market makers, and a tokenization sandbox, with the largest exchange Bitkub’s daily trading volume reaching $60 million.

Thailand Cryptocurrency ETF Launches Early in the Year to Lower Entry Barriers

According to a report by The Bangkok Post on Thursday, Jomkwan Kongsakul, Deputy Secretary-General of the Thai Securities and Exchange Commission, said that the regulatory authority plans to release formal guidelines “early this year” to support the establishment of cryptocurrency ETFs in Thailand. Kongsakul stated: “One major advantage of cryptocurrency ETFs is their accessibility; they eliminate concerns about hacking and wallet security, which are major barriers faced by many investors.”

This perspective hits at the main concerns traditional investors have about cryptocurrencies. For institutional investors and conservative retail investors, the technical barriers to managing crypto wallets, the security risks of private key custody, and fears of exchange hacks or closures are significant obstacles to entry. Cryptocurrency ETFs provide a familiar and secure investment channel, allowing investors to buy through traditional securities accounts without handling wallets and private keys themselves.

The Thai Securities and Exchange Commission indicated that cryptocurrencies will be regarded as “another asset class,” enabling investors to allocate up to 5% of their diversified portfolios to digital assets. This 5% cap is a cautious setting, allowing participation in the potential gains of the crypto market while limiting overexposure risks. For professional institutional investors, a 5% allocation can already amount to a substantial absolute sum.

The Thai SEC has, in principle, approved cryptocurrency ETFs, which are currently in the final stages of confirming investment and operational rules. This means that the technical and regulatory frameworks are essentially complete, with only details and processes being refined. The scheduled launch early in the year shows that the Thai SEC is accelerating efforts to seize a competitive advantage regionally.

Thailand Futures Exchange Opens Crypto Futures to Build a Complete Ecosystem

The Thai SEC will also regulate and permit cryptocurrency futures trading on the Thailand Futures Exchange (TFEX). Other key initiatives include establishing liquidity market makers and recognizing digital assets as a formal asset class under the Derivatives Act. These measures collectively build a comprehensive crypto financial ecosystem.

The opening of crypto futures trading provides professional investors with hedging and arbitrage tools. Futures contracts allow investors to speculate or hedge on prices without actually holding cryptocurrencies. This tool is especially important for large institutions, as they need to manage portfolio risk exposure. The existence of futures markets will also improve price discovery efficiency in the spot market.

The establishment of liquidity market makers is another critical measure. Market makers provide quotes on both buy and sell sides to increase market liquidity, narrow bid-ask spreads, and enable large transactions to be executed at better prices. In traditional financial markets, market makers are core components of market microstructure. Introducing this mechanism into Thailand’s crypto market will significantly enhance market quality.

Recognizing digital assets as a formal asset class under the Derivatives Act is a major legal breakthrough. It means cryptocurrencies are no longer in a regulatory gray area but are officially incorporated into the financial regulatory system. This legal certainty removes a major obstacle for institutional investors.

Current State of Thailand’s Crypto Market and Regional Ambitions

Although crypto payments are prohibited, Thailand remains committed to becoming a regional crypto hub for institutional investors, as retail trading remains popular. The country’s largest exchange, Bitkub, has a daily trading volume of about $60 million. While this figure is less than global giants like Binance or Coinbase, it is already leading in Southeast Asia.

Thailand’s policy of banning crypto payments but allowing crypto investments reflects a cautious regulatory philosophy. The ban on payments aims to protect the Thai Baht’s monetary sovereignty and prevent cryptocurrencies from becoming competitors to fiat currency. However, permitting investments recognizes cryptocurrencies as a legitimate asset class, providing investors with diversified options.

Thailand’s regional ambitions create a competitive landscape with Singapore and Hong Kong. Singapore has already introduced a comprehensive crypto regulatory framework, while Hong Kong is actively promoting stablecoins and tokenized bonds. Thailand’s strategy focuses on attracting institutional capital through ETFs and futures, rather than maximizing retail trading volume.

Strengthening Financial Influencer Regulation to Combat Illegal Promotions

The U.S. Securities and Exchange Commission is also strengthening oversight of so-called “financial influencers.” Kongsakul said, “Any advice related to securities or investment returns requires proper authorization, whether as an investment advisor or introducing broker.” This regulation targets KOLs (Key Opinion Leaders) promoting crypto investments on social media.

This type of regulation is increasingly common worldwide. Many countries have found that unauthorized financial influencers often make exaggerated or false investment claims, misleading retail investors. Thailand requires financial advice providers to be licensed, aligning with traditional financial advisory standards.

Additionally, Kongsakul stated that the agency is working with Thai banks to establish a tokenization sandbox, “encouraging bond issuers to enter the regulatory sandbox.” The tokenization sandbox provides a controlled environment for innovative companies to test tokenized products under real market conditions, under close supervision by regulators.