Thailand’s Securities and Exchange Commission (SEC) has introduced a regulatory framework permitting the establishment and management of cryptocurrency exchange-traded funds (crypto ETFs) in Thailand. Effective October 16, 2026, the framework establishes requirements for spot-trade crypto ETFs, listing on the Stock Exchange of Thailand (SET), delegated digital asset investment management, and digital asset custody arrangements, while restricting margin loan trading and limiting retail access to foreign crypto ETFs.
The framework, which comprises 11 related regulations, is intended to broaden investment choices in digital assets, promote synergies between local fund managers and local digital asset operators, and support the development of Thailand’s digital asset market, while enhancing investor protection.
Product Structure and Investment Scope
Crypto ETFs must use a passive investment scheme by which returns generally correspond to the price movement of the underlying cryptocurrency. Crypto ETFs must dedicate direct investment to a single cryptocurrency and maintain an average annual crypto net exposure of at least 80% of net asset value. During the initial phase, the underlying cryptocurrency is limited to Bitcoin or Ethereum, which the SEC selected based on factors including liquidity, general acceptance, network security, and investor protection.
Operational Readiness Requirements
SEC-licensed asset management companies seeking to establish crypto ETFs must demonstrate sufficient operational readiness, including appropriate personnel, operational systems, and arrangements with relevant service providers.
Custody and Investor Protection Measures
The regulations introduce several investor protection measures:
- Crypto ETFs must be listed on the SET.
- Margin financing for trading of crypto ETFs is strictly prohibited, consistent with restrictions on direct trading of digital assets on licensed Thai exchanges.
- Crypto ETF fund managers must disclose adequate information to investors before trading, including product characteristics, fund structure and mechanism, associated parties, and relevant risks, and must provide guidance on portfolio allocation consistent with the investor’s self-assessed risk tolerance.
Delegation to Digital Asset Custodians and Fund Managers
The framework sets out requirements for engaging licensed Thai digital asset operators supervised by the SEC. Key requirements include the following:
- Crypto ETF fund managers must delegate custody of crypto assets to an SEC-licensed digital asset custodial wallet provider. There are currently two licensed providers, though the SEC has indicated that it may consider permitting the use of qualified foreign digital asset custodial wallet providers in the future where necessary and appropriate.
- Licensed digital asset custodial wallet providers and certain qualified digital asset business operators may apply to be listed as trustees of crypto ETFs, subject to qualification and registration requirements covering financial status, operational systems, personnel, and related matters.
- Crypto ETF fund managers may also delegate the management of cryptocurrency investments to an SEC-licensed digital asset fund manager. There are currently two licensed operators.
The SEC has also amended its investment rules to permit Thai mutual funds and private funds to invest in the new domestic crypto ETFs. Previously, such funds were permitted to invest only in foreign crypto ETFs, subject to existing investment limits.
Restrictions on Foreign Crypto ETF-Related Products
While permitting domestic crypto ETFs, the SEC imposes restrictions on trading or offering foreign crypto ETFs to retail investors in Thailand. In addition, the issuance of depositary receipts (DRs) referencing foreign crypto ETFs will no longer be permitted. Securities companies may not facilitate investments in foreign crypto ETFs for retail investors in Thailand. However, this restriction does not extend to institutional investors and ultra-high-net-worth investors.
Business Implications
Domestic crypto ETFs should be an appealing option for retail investors, given the capital gains tax exemption that applies to all products listed on the SET as well as the enhanced investor protection measures. The restrictions on foreign crypto ETFs and the new domestic crypto ETF framework are expected to facilitate collaboration between crypto ETF fund managers and licensed digital asset operators, such as digital asset fund managers and digital asset custodial wallet providers, supporting the broader development of Thailand’s digital asset industry.
Market participants involved in the establishment, distribution, custody, management, or investment of crypto ETFs should assess their operational readiness, service provider arrangements, licensing status, and compliance measures in light of the new requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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