Thailand SEC to launch DLT-based trading platform for digital tokens

Thailand’s Securities and Exchange Commission (SEC) is getting ready to launch a trading system built on distributed ledger technology (DLT) to assist securities firms in trading digital tokens. 

Jomkwan Kongsakul, the deputy secretary-general of the SEC, said this effort is intended to improve the effectiveness of the capital market by promoting an electronic securities ecosystem. Due to the rising popularity of token investments, the regulator wants to use technology to assist securities companies in capitalizing on their extensive investor networks.

Kongsakul also stated that new regulations will be implemented to facilitate the issuance of electronic securities and the online purchase of debentures, which are medium-to-long-term debt instruments that corporations use to raise funds. 

SEC approves digital tokens for Thailand’s DLT bond system

The SEC has already signed off on four digital token projects that will be traded on its new DLT-based system for debt instrument trading, with two more in the pipeline for green tokens and investment-based projects. The planned system will fully digitize bond trading for primary and secondary markets, including settlement, trading, investor registration, and payment processes.

While the SEC has not revealed which blockchain networks it will use, it has revealed that the system will be interoperable across multiple chains and support standard transaction standards.  

According to Kongsakul, a single ledger would link all trading systems, and the project should be finished soon. Two types of securities will be issued within this framework: Tokenized traditional securities, which convert existing financial instruments into digital assets, and electronic securities, which are digital-native assets created specifically for blockchain networks for the first time. Thailand’s digital asset market has been shifting towards institutional adoption of regulated tokenized securities and investment products.

Binance Thailand CEO Nirun Fuwattananukul has also observed this change, stating that the country’s crypto market is gradually maturing. 

Thailand is exploring Bitcoin payments with the Phuket sandbox

The Thai central bank still prohibits using cryptocurrencies for payments, but a Bitcoin payment sandbox will open in Phuket later this year. This pilot program will give foreign visitors other forms of payment while safeguarding against the associated risks that regulators need to identify in a controlled environment. Recently, former Thai Prime Minister Thaksin Shinawatra supported stablecoin and digital token trading, saying that such activities pose minimal risks.

Media outlets have also reported that the Thai government is considering creating a government bond-backed stablecoin, although no word on this has been forthcoming. 

The SEC’s adoption of DLT addresses problems in traditional bond trading. The time between a bond’s issuance and its trading on the secondary market now stands between 7 and 14 days. The regulator is looking to harness the latest technology to streamline the issuance process, enhance liquidity, and facilitate real-time trading with the near elimination of settlement delays.

In addition, the Thai SEC is establishing an Open API data platform that will provide investors with more information about the market and better decision-making tools. All of these moves are being made to integrate blockchain technology into its financial markets and increase the transparency, efficiency, and adoption of digital assets.

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