SEC Thailand Launches Digital Asset Regulation Sandbox To Encourage Innovation

JAKARTA - In an effort to encourage innovation and development of digital asset services, the Thailand Securities and Exchange Commission (SEC) officially launched the Digital Asset Regulatory Sandbox on August 9, 2024 in Bangkok.

This initiative aims to facilitate testing and development of digital asset services in controlled environments, while promoting innovation in the Thai capital market. This move is expected to provide a significant boost to the digital asset ecosystem in Thailand and make it the center of innovation in Southeast Asia's capital market.

The sandbox regulation is designed to accommodate six digital asset-related services, namely digital asset exchanges, digital asset brokers, digital asset dealers, digital asset fund managers, digital asset advisors, and digital asset custodian wallet providers. Through this initiative, the Thai SEC hopes to create a platform for companies to test their new business and technology models while complying with flexible regulations.

Quoted from Bitcoin.com News, based on an announcement from the Thai SEC, interested parties are welcome to participate in this sandbox to test services related to their digital assets, as well as promote innovative development in the capital market under a flexible regulatory framework.

The sandbox participants will be evaluated based on various factors, such as capital adequacy, work system, management structure, and operational conditions. This evaluation aims to ensure that participants are ready to operate within the sandbox framework.

In addition, participants must define their service scope specifically to minimize risk and potential impact during the sandbox period, which is limited to one year from the approval date. However, participants can apply for an extension for further service testing after that period.

The initiative received positive support after the Thai SEC held a public audience in May, in which most of the respondents supported the proposed principles and regulatory changes. During the hearing, the Thai SEC asked for feedback from various stakeholders to ensure that the sandbox could meet innovation needs in the Thai capital market.