Thailand is moving closer to permitting domestic spot cryptocurrency exchange-traded funds, with Bitcoin and Ether positioned as the first eligible assets under a proposed framework. The country's Securities and Exchange Commission (SEC) is now inviting public feedback on revised rules intended to broaden investment options while reinforcing investor protections.

The proposal arrives amid a broader shift among securities regulators worldwide. U.S. authorities approved spot Bitcoin ETFs in January 2024 and spot Ether ETFs later that year, Hong Kong debuted spot Bitcoin and Ether ETFs in April 2024, and Canada has listed spot crypto ETFs since 2021. Finalizing its framework would place Thailand among a still-limited group of markets permitting domestically listed spot crypto ETFs. The proposal represents a notable development for Thailand's regulated crypto market, though the framework remains subject to consultation and has not yet created a live ETF market.

80% Minimum Crypto Exposure

Under the proposed rules, crypto ETFs would be passively managed and designed to track the price performance of a single underlying cryptocurrency. Each fund would be required to maintain average net exposure of at least 80% of its net asset value to that crypto asset over the accounting year.

According to the SEC, eligible cryptocurrencies must satisfy standards covering liquidity, broad market acceptance, network security, and investor protection. Bitcoin and Ethereum would qualify during the initial phase.

The structure could give Thai investors regulated access to spot crypto exposure through the traditional capital market, rather than requiring them to hold digital assets directly.

Stricter Custody and Investor Safeguards

The proposed framework would require crypto ETF assets to be held primarily with digital asset custodians supervised by the Thai SEC, with overseas custodians permitted where necessary and appropriate. That requirement would draw on an existing licensing architecture: Thailand has regulated digital asset exchanges, brokers, dealers, and custodians under its Emergency Decree on Digital Asset Businesses since 2018, with the SEC serving as the supervisory authority.

The funds would trade exclusively on the Stock Exchange of Thailand. Asset managers would be required to provide clear information about fund structures, risks, and investment mechanisms.

Investor protections would additionally include education and confirmation that investors understand the risks before trading. The SEC has emphasized avoiding excessive concentration in digital assets and matching investments with individual risk tolerance.

Thailand's latest proposal builds on an earlier consultation launched in April. The immediate next step is the conclusion of the public feedback process, after which the SEC can finalize the rules that would clear the first Thai spot crypto ETFs to list on the Stock Exchange of Thailand. If finalized, the framework could strengthen the country's digital asset ecosystem while bringing Bitcoin and Ether exposure closer to conventional regulated investment products.