In a recent announcement, Thailand’s Securities and Exchange Commission (SEC) said it is currently studying ways to amend its royal decree on digital assets. The jurisdiction wants to create a competitive market in Thailand, while also prioritizing investor protection.
Thailand’s Royal Decree on Cryptocurrency Explained
Earlier this year, Thailand launched an Initial Coin Offering (ICO) portal to help companies compliantly issue digital assets. The Thai government provided a regulatory framework — its ‘royal decree’ — to cover exchanges, brokerage firms, dealers, and ICO portals. All exchanges, brokers, and dealers who wish to operate in the country must be granted a license from the country’s Finance Ministry, while participation through the ICO portals require SEC approval.
The SEC has provided data concerning the number of players in the regulated space. So far, five companies have been granted a license to operate a digital asset exchange. Out of the five, two are currently operating, one was voluntarily shut down, and two others have yet to launch.
Three companies have seen approval to operate as a digital asset broker-dealer. Only one is currently operational. When it comes to ICO portal companies, the Thai SEC says it has approved a total of three.
Now, in a recent announcement, the Thai SEC says it will amend its royal decree in the coming year to facilitate growth in terms of digital asset use. At the same, the regulator says it is aware of the inherent risks involved, and will continue to protect investors from any unnecessary risks.
Ruenvadee Suwanmongkol, Security General of the Thai SEC, says the regulator is currently searching for any hurdles which prevent the Thai market from competing on a global level. According to Suwanmongkol,
“The regulator must be flexible to apply the rules and regulations in line with the market environment. For example, laws should not be outdated and should serve market needs, especially for new digital asset products, and be competitive with the global market. We need to explore any possible obstacles.”
Security Tokens in Thailand Explained
Thailand has shown consistent support for security tokens throughout the past year. Security Token Offerings (STOs) represent the integration of blockchain technology powered by ‘trustless’ cryptographic hashing and traditional financial securities.
Such financial instruments require resource intensive management and oversight for the sake of regulatory compliance and, more generally, overall functionality. Issuers of securities must maintain who owns those securities, how much each owner has, the associated rights or dividends tied to each asset — along with a means to facilitate those rights or the payouts of those dividends. Yet assets which are recorded on a blockchain can allow for seamless management and oversight, eliminating costly middlemen and third parties that are commonly seen in today’s legacy systems.
Besides issuers, many benefits arise for investors as well. Global markets connected through the internet can operate 24/7/365, such as the developing tZERO or OpenFinance Network. This is a stark difference from traditional stock exchanges which shut down during the late afternoon, on weekends, and on national holidays as well.
Tokenization also enables fractional ownership of high-valued assets, making them more liquid and easier to sell. Some anticipate a future of nearly every regulated security experiencing the benefits of blockchain.
While financial regulators around the globe have taken different stances, Thai regulators have stood out as a proactive body aiming to attract business in the digital asset realm.
What do you think about the Thai SEC planning to amend its royal decree? How will this affect the digital asset space in Thailand? We want to know what you think in the comments section below.