The Securities and Exchange Commission (SEC) of Thailand is set to introduce a new trading system for digital tokens, leveraging distributed ledger technology (DLT) to enhance market efficiency and attract securities firms into the digital asset space, according to local reports published on February 3.
Notably, Jomkwan Kongsakul, deputy secretary-general of the Thai SEC, stated that token investments have been gaining traction, prompting the regulator to explore new methods to facilitate digital asset trading.
“The SEC is leveraging technology to enhance efficiency in the capital market by promoting an electronic securities ecosystem,” Kongsakul said. She added that new regulations will be implemented to support the issuance of electronic securities and online debenture purchases.
Key Developments in Thailand SEC’s Initiative:
The SEC has approved four digital token projects and is reviewing two more, focusing on green tokens and investment-based projects. Also, five additional firms have engaged in preliminary discussions regarding innovative fundraising solutions, such as soft power and green tokens.
Moreover, securities companies will soon be allowed to trade digital tokens, leveraging their existing investor bases to increase market participation.
Currently, purchasing bonds in the primary market requires 7-14 days before they can be traded in the secondary market, leading to liquidity and accessibility challenges. The SEC aims to resolve these inefficiencies by implementing a fully digitalized bond trading system covering settlement, trading, investor registration, and payment processing.
The system will also allow for interoperability among different DLT infrastructures, ensuring a standardized framework for data connectivity.
“In the future, there may be multiple chains for trade. Trading through DLT on all systems is connected by a shared ledger, which is expected to be completed soon,” Kongsakul said.
Dual Securities Model and Market Impact
The SEC’s digitalization strategy includes two types of securities issuance:
- Digital-native securities: Products initially launched and traded exclusively within a digital ecosystem.
- Tokenized traditional securities: Conventional securities that are digitized and integrated into the DLT framework, enabling improved trading efficiency.
By utilizing blockchain-based technology, the new system is expected to introduce fractional trading, increasing accessibility for retail investors and enhancing liquidity. Real-time transactions will minimize settlement issues, making the trading process more seamless.
In addition to digital securities, the Thai SEC is also developing an Open API data platform, which will provide investors with real-time financial data from listed companies. This initiative aims to improve investment decision-making by offering transparent and accessible information.
Broader Crypto Regulatory Landscape
Thailand’s regulatory stance on cryptocurrencies remains mixed. While tokenized securities are being integrated into financial markets, the central bank still prohibits the use of cryptocurrencies for payments.
However, a Bitcoin payment sandbox is set to launch in Phuket later this year, providing foreign tourists with an alternative payment method while allowing regulators to study potential risks.
