Thailand's Securities and Exchange Commission (SEC) has authorized domestic mutual funds and private funds to invest in bitcoin and ether exchange-traded funds (ETFs) listed on the Stock Exchange of Thailand (SET), with the new rules taking effect on October 16. The decision shifts crypto ETF access from overseas-issued products — which brokers may offer only to institutional and ultra-high-net-worth clients — toward a domestically listed format operating under the SEC's own rulebook.

The framework was issued on October 8 through 11 regulatory notifications. Until now, Thai funds could gain exposure to crypto ETFs only through products issued overseas. Existing investment limits remain unchanged, the SEC said.

The 11 notifications bar depositary receipts tied to overseas products

Only bitcoin and ether are eligible for now. Any additional tokens will depend on liquidity, market acceptance, blockchain network security and investor protection, according to the regulator. As written, that confines eligibility to the two largest cryptocurrencies, with any expansion hinging on the criteria the SEC itself has set.

In the initial phase, depositary receipts linked to international crypto ETFs are not permitted. Brokers also remain barred from facilitating foreign crypto ETF investments for clients outside the institutional and ultra-high-net-worth categories. Together, the two measures point the opening phase toward home-listed funds: repackaged foreign ETFs are off the table, and broker access to overseas products stays confined to institutional and ultra-high-net-worth clients.

Nirun Fuwattananukul, CEO of Binance Thailand, said purchasing through an existing brokerage account removes a barrier for investors hesitant to open exchange accounts and manage wallets. Before any product can launch, issuers must still complete fund registration, obtain product approval, secure a SET listing and arrange custody, he added. Which issuers move first through that pipeline will shape the initial slate of domestic products.

October 16 marks the date the framework enters into force, not a confirmed first trading day.

A single coin must make up at least 80% of net asset value

Each fund will operate as a passive vehicle tracking the price of a single coin, and must hold at least 80% of its net asset value in that coin, averaged over each accounting year.

Custody must be entrusted to SEC-regulated digital asset custodians. Any delegated custody must still involve a licensed custodian, and the SEC retained the option to approve qualified foreign custodians when necessary.

The funds may trade only on the SET, and securities firms are prohibited from extending margin loans to customers to buy them. Buyers must receive product disclosures first and acknowledge the associated risks, and companies are required to warn against overexposure to digital assets.

Asset managers may outsource investment management only to licensed digital asset fund managers, while qualified digital asset firms can serve as fund supervisors if they meet standards covering finances, staff and operations.

The SEC sought public comment on core principles in April and May, followed by draft rules in August and September. Feedback was largely supportive, the regulator said. Cryptopolitan reported in August that the draft already incorporated the two-coin limit and the 80% floor. In January, SEC deputy secretary-general Jomkwan Kongsakul said crypto ETFs had been approved in principle.

In June 2024, Thailand approved its first spot bitcoin ETF, though only for institutional investors. The October rules widen participation to domestic mutual and private funds. Crypto gains are also subject to a 0% capital gains rate from January 1, 2025, through end of 2029.

With a crypto user rate of 20% compared with 13% in the United States, Thailand is said to have the most crypto users per capita in the world. Against that backdrop, the new framework gives pooled funds a locally listed, SEC-supervised channel into bitcoin and ether exposure.