Thai SEC Unveils DLT Trading Platform for Digital Tokens

The Securities and Exchange Commission (SEC) of Thailand has announced plans to introduce a distributed ledger technology (DLT)-based trading platform specifically for securities firms to engage in the trade of digital tokens. This move is part of the regulator's strategy to leverage technology in enhancing the efficiency of the capital market by promoting an electronic securities ecosystem.

Jomkwan Kongsakul, the deputy secretary-general of the Thai SEC, highlighted the increasing popularity of token investments and the regulator's intention to allow securities companies to trade digital tokens, leveraging their substantial investor bases. Kongsakul also mentioned that new regulations would be introduced to support the issuance of electronic securities and facilitate online purchases of debentures, which are medium-to-long-term debt instruments used by large companies for borrowing.

The SEC's new DLT debt instrument trading system has already approved four digital token projects, with two additional projects under review. These projects include green tokens and investment-based projects. The planned system aims to fully digitize bond trading for both primary and secondary markets and will cover various processes such as settlement, trading, investor registration, and payment. It also promises support for multiple blockchain chains with interoperability standards, although specific chains have not been disclosed.

The future trading system is expected to be connected through a shared ledger, which will enable trading across multiple chains. This DLT-based system is anticipated to be completed soon, according to Kongsakul. The SEC plans to issue two types of securities: tokenized traditional securities and electronic securities, which are digital-native assets from inception.

Despite the growing institutional focus on tokenized securities and crypto assets within Thailand's evolving crypto landscape, the use of cryptocurrencies for payments remains prohibited by the Thai central bank. However, a pilot program is slated to launch on the tourist island of Phuket later this year, offering a crypto payment alternative for foreign visitors and allowing regulators to evaluate risks in a controlled sandbox environment.

In the broader context of Thailand's engagement with digital currencies, former Prime Minister Thaksin Shinawatra has previously remarked on the lack of risk in trading stablecoins and other digital tokens backed by tangible assets. Additionally, the Thai government is reportedly considering the issuance of a stablecoin backed by government bonds, although no official announcement has been made as of the last report on January 30.