Headline: Thailand pushes ahead with spot Bitcoin and Ether ETF rules — sets 80% exposure floor, favours onshore custody Thailand’s Securities and Exchange Commission has moved its long-anticipated framework for locally listed spot Bitcoin and Ether ETFs into the draft regulation stage, setting a clear set of limits and safeguards designed to bring crypto exposure into the mainstream while keeping custody and operational control largely onshore. What’s new - The SEC opened two public consultations in late August (announced Aug. 24; consultations began Aug. 21) and will accept comments on both papers through Sept. 20. - Draft rules allow passive, single-asset spot ETFs that track only Bitcoin or Ether — the two cryptocurrencies the regulator judges sufficiently liquid and broadly accepted for a first wave of products. - Each ETF must maintain an average net exposure of at least 80% of its net asset value to its underlying crypto across each accounting year — a binding floor intended to ensure meaningful direct exposure to the underlying asset. - Thai-domiciled crypto ETFs would trade exclusively on the Stock Exchange of Thailand (SET), enabling retail and institutional investors to get crypto exposure via securities accounts without handling wallets directly. Custody, trustees and foreign providers - The revised draft keeps licensed domestic digital asset custodians as the primary custody option but gives the SEC discretion to permit qualified foreign custodians “when necessary and appropriate.” - Foreign custodians, if approved for mutual or private fund use, must operate under the supervision of a regulator with legal authority over their activities and come from jurisdictions with regulatory standards and investor-asset protections the Thai SEC deems adequate. - Qualified digital asset custodians and other properly prepared digital-asset businesses can serve as trustees for ETFs, subject to minimum capital, staffing and systems requirements and ongoing compliance. Who can run and use the ETFs - Asset management companies established in Thailand would establish and manage the ETFs; any digital-asset investment activity may be delegated only to a licensed digital asset fund manager. - Existing mutual funds and private funds — which previously could invest in foreign crypto ETFs within existing limits — would be allowed to invest in Thai-domiciled crypto ETFs under the same investment control frameworks. - Alternative products referencing overseas crypto ETFs (for example, depositary receipts linked to foreign crypto ETFs) will not be permitted in the first stage; the focus is on locally listed structures. Operational and investor-protection measures - Fund managers must demonstrate operational readiness: qualified personnel, robust systems and access to service providers capable of supporting crypto ETF operations. - Disclosures, risk explanations and investor-education measures remain part of the draft to ensure buyers understand crypto exposure and product structure. Regulatory context and roadmap - The ETF framework builds on regulatory work throughout 2026. In January the SEC said the products had approval in principle; since then officials have been refining investment, operational and custody rules and considering liquidity measures such as market makers. - The push complements other reforms: in February Thailand classified cryptocurrencies as permissible underlying assets under the Derivatives Trading Act, enabling regulated futures and options, and later proposed streamlining derivatives licensing for digital asset firms. The SEC and the Bank of Thailand are also working on tokenization pilots such as bond-token sandboxes. - Thailand has already approved a narrower spot Bitcoin fund for institutional and ultra-high-net-worth investors (June 2024). This draft goes further by creating rules for ETFs listed directly on the SET, while initially limiting eligible underlying assets to Bitcoin and Ether. Why it matters The framework aims to expand institutional and retail access to spot crypto exposure through familiar securities channels while mitigating operational risks tied to direct ownership (wallet custody, hacks). The 80% exposure floor and onshore custody preference push the product toward genuine spot exposure and bolster investor protection, even as regulators leave room to tap qualified foreign custody capacity where domestic providers can’t meet needs. Next step Public comments on both consultation papers are open until Sept. 20. After that, the SEC will proceed through its regulatory process to finalize the rules. For market participants and observers, the consultations are a window into Thailand’s strategy: cautious, staged liberalization that prioritizes liquidity, custody controls and investor safeguards while positioning the country to expand institutional crypto products. Read more AI-generated news on: undefined/news