Is Thailand a New Save Haven for Crypto Investors?

Thailand's securities watchdog has launched a sandbox for cryptocurrency businesses as the country continues to thread the fine line between regulatory restrictions and crypto innovation. The Thailand SEC claims that the sandbox is designed to facilitate experiments and develop the development of innovations supporting the efficient provision of digital asset services in the real life context. Could Thailand be the next safe haven for crypto investors, or is it like many other countries who are heavily regulated?

SEC's new Sandbox now open for applications

The official launch of the Digital Assets Regulatory Sandbox was implemented months after the Thai SEC board passed a resolution approving its establishment in March 2024. Experts have also highlighted how the introduction of this policy coincided with the booming crypto market, which has the potential of reaching 7.84 million users by 2025. This growing market underscores the need for this sandbox project as a platform for safely texting and scaling digital asset services. The authorities subsequently issued the regulation for eligible services, which includes: exchanges, brokers, dealers, fund managers, advisors, and custodial wallet providers. Participants who want to join the program have to go through stringent qualifications checks. Among other qualifications, the Thai SEC will consider aspects such as capital adequacy, work systems, management structure and other conditions to ensure that sandbox participants are well prepared to provide services within the framework. Participants need to also specify the scope of services to reduce potential risks and impact that may occur during the sandbox period of no longer than one year from the approval date.

Thailand's cryptocurrency regulations

While Thailand is considered as a relatively friendly jurisdiction for regulating cryptocurrencies, the Thai government, along with the Securities and Exchange Commission (SEC), made significant strides in regulating and legitimizing cryptocurrency activities starting in 2018. They began by officially recognizing digital assets and establishing a comprehensive legal framework. This foundational regulatory work enabled the orderly expansion of the crypto market, including the approval of Thailand’s first Initial Coin Offering (ICO) portal and the introduction of tax policies specifically designed for digital assets. The Thai SEC was instrumental in overseeing the sector’s growth, enforcing rigorous guidelines to ensure transparency and protect investors. These initiatives have created a solid foundation for cryptocurrency trading and investment, paving the way for more advanced regulatory measures such as the Digital Asset Regulatory Sandbox.

But in recent months, Thailand has been shifting towards a more crypto-friendly stance when it comes to their regulatory approach, approving several important initiatives. In June 2024, the Thai SEC reportedly endorsed One Asset Management (ONEAM) as the first firm to launch a Bitcoin exchange-traded fund (ETF) in Thailand.

Also, in March, the Thai government approved tax breaks for individuals holding investment tokens to promote the use of the token for fundraising.

In January, the SEC lifted restrictions on retail investors purchasing digital tokens backed by real estate or infrastructure projects. Prior to this decision, retail investors were limited to investing a maximum of $8,500 in these digital assets.