Thailand has approved regulatory changes that will allow digital assets to serve as underlying instruments for regulated derivatives, marking a significant step toward integrating crypto into the country’s formal capital markets.Thailand’s Cabinet approved amendments to the Derivatives Act that enable cryptocurrencies to back derivatives products, according to the Thailand Securities and Exchange Commission. The move formally recognizes digital assets as eligible investment underlyings within Thailand’s regulated financial framework.“This development will help promote more inclusive market growth, facilitate diversification and more effective risk management, and expand investment opportunities for a broader range of investors,” said Pornanong Budsaratragoon, secretary-general of the SEC.Rules to follow, coordination with TFEXThe SEC said it will draft follow-up rules to update derivatives licenses, allowing digital asset operators to offer crypto-linked contracts. The regulator will also review supervisory requirements for exchanges and clearing houses and coordinate with Thailand Futures Exchange (TFEX) to set contract specifications aligned with the risk profile of digital assets.The reform aligns with the SEC’s previously announced three-year capital markets plan, which includes tokenization initiatives and the development of crypto exchange-traded funds, signaling a broader push to integrate digital assets into regulated investment channels.Industry reaction: overdue, but risks remainLocal market participants said the move is overdue but cautioned that safeguards will be critical. “Digital assets already function as financial instruments in practice,” said Pichapen Prateepavanich, policy strategist and founder of infrastructure firm Gather Beyond, adding that expanding the Derivatives Act aligns regulation with market reality by bringing activity into a clearer legal structure.She said properly structured crypto-linked derivatives could improve hedging, liquidity, and institutional participation. However, she warned that expanding scope “without simultaneously strengthening disclosure standards and capital requirements would increase systemic risk.”Evolving crypto policy frameworkThailand’s crypto regulatory regime dates back to 2018, when the Emergency Decree on Digital Asset Businesses granted the SEC licensing and enforcement authority over exchanges and token issuers. Oversight has since expanded to investor protection and market conduct, including restrictions on crypto payments, tighter operational rules for licensed firms, and new investment guidelines for funds.In recent years, the regulator has approved stablecoin trading on local exchanges and proposed measures to allow funds greater exposure to digital assets, alongside plans for tokenization and crypto ETFs.The latest decision underscores Thailand’s effort to balance innovation with regulation, positioning the country to deepen institutional participation in crypto—provided risk controls and disclosures keep pace, according to The Decrypt.
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