In a significant move, Thailand has opened the door for accredited investors to invest in US-listed spot Bitcoin ETFs. This development comes as the Thailand Securities and Exchange Commission (SEC) updates its regulations to include private funds that invest in these ETFs, but only institutional investors and ultra-high-net-worth individuals will have this investment opportunity.
A Regulatory Update
The change in Thailand’s investment landscape follows the approval of spot Bitcoin ETFs by the US securities regulator in January, which led to the reclassification of shares in spot Bitcoin ETFs as securities under Thai law. Previously, the rules governing asset management firms’ investments did not accommodate digital asset ETFs. Only assets recognized as securities were eligible for trading by these firms.
SEC secretary-general Pornanong Budsaratragoon emphasized that the decision to allow only accredited investors access to Bitcoin Exchange Traded Products (ETPs) stems from the inherent high risks associated with these investments. The authority exercised caution, considering the volatility and risk factors of direct investments in digital assets by asset management firms.
Limited Access for Retail Investors
While the regulatory update marks a step forward for institutional and high-net-worth investors, retail investors remain on the sidelines regarding direct exposure to spot Bitcoin ETFs. Despite the popularity of crypto trading among the Thai population, restrictions continue to limit its application, particularly in the realm of payments and lending.
In March 2022, the government prohibited the use of digital assets for payments, followed by a ban in July 2023 on cryptocurrencies for lending and investment purposes by the SEC. However, the regulator made an exception in January, lifting restrictions on retail investors buying digital tokens backed by real assets like real estate or infrastructure projects.
Crypto Trading Landscape in Thailand
The crypto trading scene in Thailand features prominent platforms like Bitkub, which offers 107 trading pairs and boasts a daily trading volume of approximately $155 million. Furthermore, the international crypto exchange giant Binance expanded its reach by launching a new exchange in Thailand in January, exclusively accessible to Thai nationals.
This regulatory shift signals Thailand’s cautious yet progressive stance towards integrating digital assets into its financial market, providing a structured and secure avenue for accredited investors to explore the potential of Bitcoin ETFs while maintaining safeguards for the broader public.
