Thailand Unveils Draft Rules for Spot Bitcoin and Ethereum ETFs

Thailand has taken another step towards establishing itself as a hub for digital assets by releasing draft rules for spot Bitcoin and Ethereum exchange-traded funds (ETFs). The Thai Securities and Exchange Commission (SEC) published two consultation documents on August 25, detailing the framework for local cryptocurrency ETFs and qualification standards for overseas digital asset custodians.

According to the draft rulebook, initial approval is limited to Bitcoin and Ethereum. Asset managers can launch passive ETFs that track the prices of these two assets, with each ETF required to include only a single cryptocurrency and maintain an average net exposure to that asset of at least 80% of its net asset value over the fiscal year.

Trading will take place only through the Thai SEC, and mutual funds and private funds can invest in crypto ETFs approved by regulators. Existing investment in overseas crypto ETFs is allowed within set limits, but alternative products designed based on these foreign ETFs are excluded for now.

The custody framework is a key issue in the discussions, with local crypto ETFs required to designate a Thailand-based digital asset custodian as the main custodian. However, if necessity and appropriateness are recognized given market conditions, they can also use qualified overseas custodians.