Thailand’s Securities and Exchange Commission has proposed a regulatory framework for spot Bitcoin and Ethereum ETFs, taking another step toward expanding regulated cryptocurrency investment products in the country.
The SEC’s latest consultation builds on an earlier proposal released in April. Feedback from that consultation, particularly around custody requirements, prompted regulators to adjust several parts of the original framework.
However, the process remains ongoing. The SEC still needs to collect public comments, revise its recommendations and decide whether to formally authorize the products. No final approval or launch date has been announced.
If adopted, the framework would give Thai investors another regulated way to gain direct exposure to the two largest cryptocurrencies without needing to purchase, store or manage Bitcoin and Ethereum themselves.
Bitcoin and Ethereum Only in First Phase
Under the proposed rules, Bitcoin and Ethereum would be the only cryptocurrencies eligible for spot ETFs during the initial phase. The products would trade exclusively on the Stock Exchange of Thailand.
Licensed asset management companies would operate each ETF as a passive investment vehicle tracking a single cryptocurrency rather than actively trading multiple digital assets.
The draft requires each fund to maintain an average net exposure of at least 80% of its net asset value to the underlying Bitcoin or Ethereum during each accounting year.
Investor protection requirements would also apply. Fund managers would need to provide clear disclosures covering the ETF's structure, investment risks and key service providers involved in operating the product.
The SEC is therefore taking a relatively narrow approach initially, focusing on the crypto market’s two largest and most established assets.
Thai Funds Could Invest in Domestic Crypto ETFs
The proposed framework would also allow Thai mutual funds and private funds to invest in locally domiciled crypto ETFs.
These investment vehicles can already gain exposure to certain foreign-issued crypto ETFs, but the new rules would add locally traded products to their available options. Existing investment limits would continue to apply.
However, the SEC is not proposing to approve every type of crypto-linked financial instrument immediately.
During the first phase, alternative products linked to overseas crypto ETFs, including depositary receipts, would remain excluded. This suggests regulators want to establish a functioning domestic spot ETF market before expanding into more complex structures.
SEC Adjusts Crypto Custody Requirements
One of the biggest changes from the April consultation involves how the underlying Bitcoin and Ethereum would be stored.
The latest proposal maintains licensed domestic digital asset custodians as the primary custody option for locally issued crypto ETFs. However, regulators could permit qualified foreign custodians when circumstances make their involvement necessary or appropriate.
Foreign custodians could also potentially register as mutual fund supervisors for crypto ETFs.
To qualify, an overseas custodian would need to be properly authorized in its home jurisdiction and supervised by a regulator with appropriate legal authority. Thailand’s SEC would additionally need to determine that its asset protection standards meet domestic requirements.
The approach attempts to combine local regulatory oversight with access to established international crypto custody infrastructure.
Thailand Continues Its Crypto Regulatory Push
The ETF consultation forms part of a broader effort by Thailand to develop a regulated digital asset ecosystem.
In January, SEC Deputy Secretary-General Jomkwan Kongsakul said crypto ETFs had received approval in principle. Regulators have argued that exchange-traded products could reduce some of the wallet management, hacking and private-key risks associated with directly owning cryptocurrency.
Thailand had already taken an important step in June 2024 by approving its first spot Bitcoin ETF for institutional and high-net-worth investors. The latest framework could significantly broaden the domestic market for regulated crypto investment products.
Tax policy has also become part of Thailand’s strategy. The country currently provides a 0% personal income tax rate on qualifying cryptocurrency capital gains generated through licensed platforms, with the exemption running from January 1, 2025, through December 31, 2029.
Together, the tax incentive and proposed ETF framework show Thailand attempting to channel cryptocurrency activity toward locally regulated financial products and service providers.
For now, Bitcoin and Ethereum remain the focus. If the consultation ultimately becomes formal regulation, Thailand could provide investors with another regulated route into crypto while continuing its broader ambition of becoming a major digital asset hub in Southeast Asia.
