Thailand’s securities regulator has published draft rules for locally established crypto ETFs that would hold Bitcoin or Ether, require an 80% average exposure floor, and keep custody mainly with Thai providers.
- BTC and ETH first, no altcoin buffet
- 80% exposure floor, the fund must stay mostly in what it promises
- Onshore custody first, Thai oversight remains the default
- Foreign custodians allowed narrowly, only when necessary and appropriate
Thailand’s Securities and Exchange Commission opened two public consultations on Aug. 24, covering draft rules for locally established crypto ETFs and revised qualification standards for foreign digital asset custodians serving mutual and private funds. Public comments on both proposals run until Sept. 20.
The framework is meant as a controlled rollout, not a free-for-all. In the first phase, asset management companies would be allowed to launch passive exchange-traded funds tracking only Bitcoin or Ether, with each fund tied to a single cryptocurrency and listed on the Stock Exchange of Thailand.
That “single-asset” design matters. Regulators are not trying to create a kitchen-sink crypto product that bundles every shiny token with a ticker symbol. They are starting with the two assets they are most willing to supervise: Bitcoin and Ether. For a regulator, that is the sensible place to begin. For anyone expecting a meme-coin parade, not so much.
The headline requirement is the 80% rule. Each ETF would need to maintain an average net exposure of at least 80% of its net asset value to the underlying cryptocurrency over each accounting year. In plain English, that means the fund must stay mostly anchored to the asset it claims to track, rather than drifting into cash, derivatives, or other side bets.
That distinction matters. “Average net exposure” is not a minute-by-minute purity test. It is an annual standard. But it still puts a real boundary around how far the product can wander from its stated goal. Without that kind of rule, a crypto ETF can start looking a lot like marketing with a balance sheet.
The SEC also wants proper infrastructure behind the products. Fund managers would need qualified personnel, suitable systems, and access to service providers capable of handling the assets. Digital-asset activity could be delegated only to a licensed digital asset fund manager.
Custody is where the Thai framework gets especially careful. The SEC said crypto ETFs will continue to be primarily required to use onshore digital asset custodians, while qualified foreign custodians may be permitted only when necessary and appropriate in light of prevailing circumstances.
“Under the revised approach, crypto ETFs will continue to be primarily required to use onshore DA custodians, while the SEC may permit the use of qualified foreign DA custodians when necessary and appropriate in light of prevailing circumstances, ” the SEC said.
That is a simple message: Thai regulators want assets held within a system they can supervise. A digital asset custodian is the entity that stores and safeguards crypto on behalf of a client or fund. If the custodian gets hacked, mismanages keys, or turns into a regulatory headache, investors do not get a heroic comeback scene. They get losses and paperwork.
Foreign custodians are not off the table, but the bar is high. For mutual funds and private funds investing in digital assets, foreign custodians would need to operate under the supervision of a regulator with legal authority over their activities and be based in a jurisdiction with adequate regulatory standards and investor asset protection rules.
The draft also tries to keep local products from becoming secondhand exposure to offshore wrappers. Existing mutual funds and private funds can already invest in foreign crypto ETFs under applicable limits, and the amendments would allow them to invest in Thai-domiciled crypto ETFs under the same investment-control framework. But products referencing overseas crypto ETFs, including depositary receipts linked to foreign crypto ETFs, would not initially be permitted.
Put simply: Thailand appears to want investors using products governed by Thai rules, not a chain of offshore wrappers layered on top of other offshore wrappers. That may be less glamorous than the global arbitrage carnival some market participants would prefer, but it is cleaner and easier to supervise.
This proposal did not appear out of thin air. The framework was first put out for public comment in April, and regulators appear to have refined it after hearing concerns about custody and operational risk. In May, the SEC proposed changes to net capital and digital asset custody rules to strengthen local custody capacity.
Thailand has also been building the broader legal scaffolding around digital assets. In February, the government recognized cryptocurrencies as underlying assets under the Derivatives Trading Act. That fits into a wider regulatory push that also includes derivatives and tokenization efforts, including a tokenization sandbox with the Bank of Thailand.
There is already a precedent for regulated crypto exposure in the country. In June 2024, regulators approved Thailand’s first spot Bitcoin ETF fund for institutional and ultra-high-net-worth investors, the ONE Bitcoin ETF Fund of Funds Unhedged and not for Retail Investors, ticker ONE-BTCETFOF-UI, managed by One Asset Management.
That earlier product was limited, but it showed the door was already cracked open. The new framework, if finalized, would push further by creating a domestic ETF structure rather than relying on a one-off product for wealthy investors.
For readers new to the jargon: a spot ETF holds the actual underlying asset rather than futures contracts. A passive ETF aims to mirror an asset’s performance rather than actively trading around it. NAV, or net asset value, is the value of a fund’s assets minus its liabilities. And onshore custody simply means the assets are held by a Thai-based provider under local oversight.
The policy logic is hard to miss. Regulators know investors want crypto exposure. They also know plenty of people do not want to juggle wallets, seed phrases, or the joys of self-custody, where freedom comes bundled with personal responsibility and no customer-support hotline when things go sideways. An ETF offers a familiar wrapper and a cleaner route through existing financial channels.
Still, the devil’s-advocate case is worth stating plainly: easier access does not make Bitcoin or Ether less volatile, less speculative, or inherently safer. It just makes them easier to buy through traditional market infrastructure. That is useful, but it is not the same as reducing the asset’s risk. Convenience often comes with a tradeoff, you give up direct control in exchange for a regulated wrapper.
Thailand’s approach looks pragmatic rather than ideological. It is not pretending demand for crypto exposure will vanish if ignored, and it is not handing the keys to offshore issuers without guardrails. Instead, it is trying to channel demand into products that are easier to police, starting with the two assets regulators are most comfortable defending.
What happens next will depend on the final rule text. Will the SEC keep the initial asset list limited to Bitcoin and Ether? Will foreign custodians remain a narrow exception, or become a practical part of the market structure? Will the 80% exposure rule be enforced in a way that actually matters? And will Thai investors use locally domiciled ETFs, or keep defaulting to offshore products and direct self-custody?
Key questions and takeaways
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What is Thailand proposing?
Draft rules for locally established crypto ETFs that would track Bitcoin or Ether, trade on the Stock Exchange of Thailand, and follow an 80% average exposure requirement. -
Why does the 80% rule matter?
It keeps the fund tied to the asset it is supposed to track. Without that floor, “crypto ETF” could become a loose label instead of a meaningful exposure rule. -
Why is custody such a big deal?
Custodians hold the private keys that control the assets. Thai regulators want those assets mainly under onshore oversight, where they can be supervised more directly. -
Are foreign custodians banned?
No. They may be allowed, but only in limited cases and only if the SEC deems them necessary and appropriate under the circumstances. -
Does this open crypto ETFs to retail investors right away?
The draft points toward a broader domestic ETF structure, but final eligibility still needs confirmation. The earlier approved Bitcoin product in 2024 was limited to institutional and ultra-high-net-worth investors. -
Why start with Bitcoin and Ether only?
They are the most established and liquid crypto assets, and they are the ones regulators are most willing to let into a controlled market structure first.
Thailand is not chasing hype here. It is building a regulated path for crypto exposure, and in a sector packed with noise, that kind of boring infrastructure is often what actually moves adoption forward.
Further reading
A few useful pieces if you want the broader ETF and institutional-crypto picture around Thailand’s move.
- Thailand advances spot Bitcoin and Ether ETF rules with 80%
- Thailand SEC consultation on crypto ETF and custodian rules
- Thailand targets early-2026 crypto ETF rollout
- Thailand moves closer to Bitcoin, Ether ETFs with draft rules
- Global crypto ETFs attract record $5.95 billion as bitcoin scales new highs
- Charles Schwab’s $12 Trillion Bitcoin and Ether Trading Launch Set for 2026
- Hong Kong Launches Crypto Margin Financing and Perpetual Contracts With Bitcoin, Ether
- BBVA Launches Crypto Trading for Spanish Retail Investors With Bitcoin and Ether
