Thailand’s Securities and Exchange Commission has revised its laws to allow the formation of private funds that invest in spot Bitcoin exchange-traded funds trading on US exchanges.
However, only institutional investors and “ultra-high-net-worth individuals” would be eligible to invest in these private Bitcoin ETF funds, according to a Bangkok Post report on March 12.
Previously, regulations governing asset management businesses’ investments did not cover digital asset ETFs, and the SEC Act only allows asset managers to enable the trading of securities.
However, after the US securities authority approved spot Bitcoin ETFs in January, shares in spot Bitcoin ETFs were classified as securities rather than crypto assets under Thai regulations.
Due to the significant risk of Bitcoin ETPs, SEC secretary-general Pornanong Budsaratragoon stated that the regulator will only allow authorized investors to invest in them.
“Asset management firms have petitioned the SEC for exposure to digital assets, particularly Bitcoin and spot Bitcoin ETFs, but we must carefully assess whether to allow asset management firms to engage in digital assets directly owing to the significant risk,” she told the Post.
In January, the Thailand Securities and Exchange Commission reportedly stated that asset management firms would not be permitted to develop their own version of spot Bitcoin ETFs within the country.
Benefits and Uncertainties
This decision has both advantages and disadvantages. Accredited investors gain access to a new investment vehicle potentially offering high returns. However, investing in US-based ETFs adds an extra layer of complexity and potential currency exchange risks. Additionally, the regulatory landscape surrounding cryptocurrencies remains fluid, and future changes in Thailand or the US could impact these investments.
The Future of Crypto in Thailand
The SEC’s move signifies a willingness to explore ways to integrate cryptocurrencies into the Thai financial system while prioritizing investor protection. It remains to be seen whether this limited access for accredited investors paves the way for broader adoption of Bitcoin ETFs in Thailand or if the SEC will develop regulations for a domestic spot Bitcoin ETF market in the future.
