Thailand Opens the Door to Crypto ETFs, but Shuts the Back Door on Foreign Ones

Thailand’s rules allowing Bitcoin (BTC) and Ethereum (ETH) ETFs on its stock exchange take effect on October 16. The same rulebook blocks brokers from steering ordinary investors into foreign crypto ETFs.

The Securities and Exchange Commission (SEC) issued 11 notifications on October 8 after two rounds of public hearings. Until now, Thai mutual funds could get crypto ETF exposure only through products listed abroad.

Why Is Thailand Keeping Crypto ETF Money at Home?

For now, the regulator will not allow depositary receipts (DRs) or other products linked to foreign crypto ETFs. DRs are locally traded certificates that track a security listed overseas.

Brokers also cannot help clients buy foreign crypto ETFs unless those clients are institutional or ultra-high-net-worth investors.

Meanwhile, Thai mutual funds and private funds may now buy local crypto ETFs, subject to existing investment limits. Taken together, the rules appear to point domestic demand toward products listed on the Stock Exchange of Thailand (SET).

No Leverage, Local Custody, and a Mandatory Risk Check

Only BTC and ETH qualify at launch. The SEC said future additions will depend on liquidity, market acceptance, network security, and investor protection.

The funds must be passive. Each must keep average net exposure to a single crypto asset at no less than 80% of net asset value over every accounting year.

Coins must sit with SEC-regulated digital asset custodians. However, the regulator said it may later accept qualified foreign custodians where appropriate.

Investors must also complete risk education and confirm they understand the product before trading. Brokers cannot offer margin loans to buy these ETFs, mirroring an existing ban on lending for crypto purchases through digital asset operators.

The approach fits a broader pattern of tighter Thai oversight, including a proposed audit of USDT transactions. For global ETF issuers, the rules suggest Thailand’s market will be built by local asset managers and custodians first.

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