Thailand SEC Proposes Rules for Spot Bitcoin and Ether ETFs

The Thai SEC has proposed new regulations for spot Bitcoin and Ethereum ETFs, focusing on local custody and strict investor protection standards.

The proposed plan stipulates that these products will trade exclusively on the national stock exchange, establishing stringent requirements for exposure, custody, and investor protection.

The Securities and Exchange Commission of Thailand (SEC) initiated a public consultation on these draft regulations on August 24. The proposals are part of a broader effort by authorities to expand investment opportunities within the local capital market while framing crypto assets in a structure similar to traditional exchange-traded funds.

During the initial phase, only BTC and ETH will be eligible assets. This leaves other cryptocurrencies outside the regime at launch, as the regulator plans to evaluate future candidates based on liquidity, market adoption, network security, and investor protection.

At Least 80% Exposure to a Single Crypto Asset

The proposed structure differs from a broadly diversified crypto fund. Each ETF must be a passively managed product that tracks the price of a specific digital asset.

Funds will be required to maintain an average net exposure of at least 80% of their net asset value to a single crypto asset for each accounting year. In practice, this creates a foundation for products that provide relatively direct exposure to Bitcoin or Ethereum, rather than combining a large number of tokens into a single basket.

Asset managers will be responsible for creating and managing these ETFs, provided they can demonstrate they possess the necessary personnel, operational systems, and service providers to ensure the product functions securely.

Trading will be restricted to the Stock Exchange of Thailand (SET). Before purchasing crypto ETFs, investors must confirm they understand the associated risks. Intermediaries will also be required to focus on diversification, the risk of excessive concentration in digital assets, and the client’s financial capabilities.

Thailand Prioritizes Local Custody

One of the more sensitive issues in the proposal concerns who will hold the crypto assets backing the funds.

In the early stages, ETFs will primarily be required to use digital asset custodians regulated within Thailand. However, the SEC has left the door open for qualified foreign custodians to be used later when necessary and appropriate.

This marks a shift from the regulator’s earlier proposal. Following consultations in April and May, the SEC revised the regime to provide greater flexibility regarding foreign providers. Any international custodians would need to be overseen by a regulator with sufficient legal authority and meet client asset protection standards acceptable to the Thai SEC.

The regulator also proposes that licensed custody companies and other qualified digital asset operators be allowed to apply for roles as supervisors of crypto mutual funds. If digital asset investment management is delegated, it can only be assigned to a licensed digital asset fund manager.

Greater Role for Local Funds

The changes extend beyond the creation of new ETFs. The SEC plans to allow Thai mutual and private funds to invest in local spot crypto exchange-traded funds. Currently, these funds can only gain similar exposure through foreign products, subject to existing investment limits.

At the same time, the regulator seeks to give the new domestic market a competitive edge. In the initial phase, certain alternative products linked to foreign crypto ETFs, including depository receipts on such funds, will not be permitted. The goal is to direct capital and product development toward the local industry, rather than allowing the new framework to serve merely as a pipeline to existing American or other foreign funds.

This approach brings Thailand closer to a model where crypto exposure is integrated into traditional exchange infrastructure while remaining under a specialized regime for custody and investor protection.

For now, the rules are not final. The public consultation remains open until September 20, 2026, after which the SEC will evaluate the feedback received before finalizing the regulatory framework.