The Securities and Exchange Commission of Thailand is set to introduce a trading platform utilizing distributed ledger technology (DLT) specifically for securities firms to engage in digital token trading.
According to a report by the Bangkok Post on February 3, the Thai SEC is recognizing the growing popularity of token investments and is preparing to enable securities companies to leverage their substantial investor bases by trading digital tokens. The deputy secretary-general of the Thai SEC, Jomkwan Kongsakul, highlighted the initiative as part of a broader effort to enhance efficiency in the capital market through the promotion of an electronic securities ecosystem.
Regulatory Developments and System Features
Kongsakul added that new regulations would be introduced to facilitate the issuance and online purchasing of electronic securities and debentures, which are debt instruments typically used by large corporations for borrowing. The planned DLT-based system will fully digitize bond trading across primary and secondary markets and will include comprehensive coverage of settlement, trading, investor registration, and payment processes. It will also support multiple blockchain chains with interoperability standards, although specific chains were not detailed.
Four digital token projects have already been approved for this new trading system, with two additional projects under review that focus on green tokens and investment-based projects. Looking ahead, the system could potentially expand to include multiple blockchain chains for trading purposes.
The evolution of Thailand’s crypto landscape is steering towards a more institutional market focus, with both tokenized securities and crypto assets gaining traction. Despite the prohibition of crypto for payments by the Thai central bank, there are plans to test a Bitcoin payment system in Phuket to cater to foreign tourists. This sandbox environment will allow regulators to closely monitor and assess the associated risks.
What The Author Thinks
Thailand’s initiative to integrate distributed ledger technology into its securities trading represents a forward-thinking approach to financial innovation, blending traditional financial instruments with modern technological advancements. By transitioning to a DLT-based system, Thailand is not only acknowledging the importance of staying competitive in the global financial landscape but also ensuring that these innovations occur within a regulated and stable framework. This balance between embracing new technologies and maintaining rigorous oversight is crucial for the healthy evolution of financial markets and investor protection. The SEC’s careful regulation and progressive adoption of DLT could serve as a model for other nations exploring similar advancements.
