Thailand Opens Draft Rules for Spot Bitcoin and Ether ETFs

Draft framework moves beyond April consultation

The latest consultation builds on a framework first released for public comment in April, when the regulator asked for views on the main principles for crypto ETFs, investment management and custody. According to the SEC, most respondents supported the overall plan, though comments on custody led officials to revise part of the original approach.

Thai regulators have been developing the structure throughout 2026. Earlier in the year, SEC deputy secretary-general Jomkwan Kongsakul said the products had already received approval in principle, while detailed investment and operational requirements were still being prepared. At that stage, regulators were also considering the role of market makers to help address liquidity needs.

Bitcoin and Ether only in the first phase

Under the August draft, asset management companies would be allowed to establish passive ETFs that track only one cryptocurrency, either Bitcoin or Ether. The SEC said the initial framework is limited to those two assets because they are currently viewed as sufficiently liquid and widely accepted for this type of product.

The funds would be listed exclusively on the Stock Exchange of Thailand. That structure is intended to give investors exposure through securities accounts rather than requiring direct handling of crypto wallets. Existing mutual funds and private funds, which can already invest in foreign crypto ETFs within applicable limits, would also be allowed to invest in Thai-domiciled crypto ETFs under the same investment control framework.

Alternative listed instruments linked to overseas crypto ETFs would remain off the table in the initial stage. The SEC said products such as depositary receipts referencing foreign crypto ETFs would not be permitted at first, leaving locally established funds as the main domestic listed route for this kind of exposure.

80% exposure floor and operational requirements

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. The draft also says asset managers would remain responsible for setting up and managing the funds, while any investment activity involving digital assets could be delegated only to a licensed digital asset fund manager.

Fund sponsors would need to show operational readiness before launching these products. That includes having qualified personnel, appropriate systems and access to service providers capable of supporting crypto ETF operations. Investor protection measures outlined in the earlier proposal, including disclosures on structure and risk as well as investor education, remain part of the framework.

Custody stays focused on domestic providers

Custody was one of the main issues raised during the April consultation, and the SEC’s revised approach keeps licensed Thai digital asset custodians as the primary option. At the same time, the regulator said it may permit the use of qualified foreign custodians when necessary and appropriate, depending on prevailing circumstances.

For mutual funds and private funds investing in digital assets, any foreign custodian would need to be supervised by a regulator with legal authority over its activities. Its home jurisdiction would also need regulatory and investor asset protection standards that the Thai SEC considers adequate. The framework further allows qualified digital asset custodians and other suitably prepared digital asset businesses to act as trustees for crypto ETFs, provided they have sufficient financial resources, staffing and operating systems.

The custody discussion fits into a broader effort to build local capacity. In May, the SEC separately proposed changes to net capital and digital asset custody rules aimed at supporting more domestic trading and customer asset custody activity while reducing reliance on overseas providers.

Part of a wider expansion in regulated crypto products

The ETF proposal follows a series of policy moves in Thailand’s regulated crypto market. In February, the government recognized cryptocurrencies as underlying assets under the Derivatives Trading Act, opening the way for regulated futures and options tied to assets such as Bitcoin. Two months later, regulators proposed easing access by letting licensed digital asset companies apply for derivatives licenses without having to create separate corporate entities.

Thailand had already approved a more limited product in June 2024, when regulators allowed the country’s first spot Bitcoin ETF fund for institutional and ultra-high-net-worth investors. The current draft goes further by setting rules for crypto ETFs established in Thailand and listed directly on the local exchange. The next confirmed step is the close of public consultations on Sept. 20, after which the SEC is expected to continue the regulatory process.