Thailand's SEC advances draft rules for spot Bitcoin and Ether ETFs

Thailand's Securities and Exchange Commission (SEC) has taken a significant step toward establishing a regulated market for spot cryptocurrency exchange-traded funds, advancing its framework for locally listed spot Bitcoin and Ether ETFs from proposed principles to draft regulations while also revising its approach to foreign digital asset custodians.

The regulator is seeking feedback on two consultation papers: one containing draft regulations for Thai crypto ETFs, and another proposing principles governing the qualifications of foreign digital asset custodians engaged by mutual and private funds investing in digital assets. The public consultation was initiated on August 24.

What the Draft Rules Require

During the initial stage, asset managers could establish passive ETFs tracking Bitcoin ($BTC) or Ether ($ETH), the only two eligible crypto assets. Under the draft rules, locally established crypto ETFs would trade exclusively on the Stock Exchange of Thailand, giving investors exposure to Bitcoin or Ether through securities accounts without requiring them to directly manage cryptocurrency wallets.

Each ETF would have to maintain average net exposure of at least 80% of its net asset value to its underlying cryptocurrency over each accounting year. Fund managers would also have to demonstrate sufficient operational readiness, including qualified personnel, appropriate systems, and access to service providers capable of handling the products.

For the initial phase, ETF structures are expected to rely primarily on onshore digital asset custodians, with qualified foreign custodians allowed only when necessary. Products including depositary receipts linked to foreign crypto ETFs would not initially be permitted, keeping locally established funds as the main listed structure for domestic investors seeking this type of exposure.

Context and Next Steps

The draft regulations follow an April consultation on the framework's broader principles, with the SEC noting that most respondents supported the framework but raised concerns about custody arrangements, prompting the regulator to revise its proposed approach.

Going forward, the SEC would determine eligible cryptocurrencies based on criteria including liquidity, general acceptance, network security, and investor protection considerations. The public consultation remains open until September 20, 2026, after which the SEC will evaluate the feedback received before finalizing the regulatory framework.

This remains a draft-stage proposal with no confirmed final approval or launch timeline, as feedback collection, regulatory revisions, and formal authorization are still pending.

Sources:
CoinTelegraph: Thailand SEC Seeks Feedback on Bitcoin and Ether ETF Rules
Crypto.news: Thailand Advances Spot Bitcoin and Ether ETF Rules with 80% Exposure Floor
The Crypto Times: Thailand SEC Weighs Bitcoin, Ethereum ETFs in New Regulatory Push