The Securities and Exchange Commission of Thailand (SEC) has moved the work on the regulatory framework for spot exchange-traded funds (ETFs) for bitcoin and ether listed on the local market from the principle development stage to the drafting of rules. Simultaneously, the regulator revised its approach to foreign custodians of digital assets.
The regulator announced on Monday that it is seeking feedback on two consultation papers. One presents draft rules for Thai cryptocurrency ETFs, while the other outlines regulatory principles for qualification requirements for foreign custodians of digital assets hired by mutual and private funds investing in digital assets.
Initially, asset managers will be able to create passive ETFs tracking bitcoin (BTC) or ether (ETH) - the only two cryptoassets that meet the requirements.
The draft rules follow April consultations on more general regulatory framework principles. The SEC stated that most respondents supported the framework but raised points regarding asset custody. This prompted the regulator to revise its proposed approach.
This regulatory framework is part of Thailand's push to become a global digital asset hub for institutional investors.
Bitcoin and Ether ETFs to Trade on Thai Stock Exchange
According to the proposed rules, Bitcoin and Ether ETFs will trade exclusively on the Stock Exchange of Thailand (SET). Each ETF will track a single cryptoasset and maintain a net exposure to it averaging no less than 80% of its net asset value throughout each reporting year.
See also: Bitcoin ETF Inflows Reach $1.9B - The Strongest Week Since October 2025
The proposed rules will allow mutual and private funds to invest in Thai-registered cryptocurrency ETFs alongside foreign cryptocurrency ETFs they are already permitted to invest in, subject to existing investment limits.
However, initially, the regulator will not permit alternative products linked to foreign cryptocurrency ETFs, including depositary receipts tracking them.
Thailand Revises Crypto Asset Custody Proposal
Under the revised approach, local digital asset custodians will remain the primary service providers for cryptocurrency ETFs in the initial phase.
"Under the revised approach, cryptocurrency ETFs will still need to predominantly use local digital asset custodians; however, the SEC may permit the use of qualified foreign digital asset custodians if it is necessary and appropriate given the prevailing circumstances," the SEC stated.
According to a separate custodian proposal, foreign service providers serving mutual and private funds investing in digital assets will need to be supervised by a regulator with appropriate legal authority. They will also need to comply with regulatory requirements and investor asset protection standards that the Thai SEC deems adequate.
The SEC will accept public comments on both consultation papers until September 20th.
Magazine: Korean Bank Partners with Ripple for Payments, Pakistan Opens Crypto Licensing: Asia Express
