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News Report

Thai Regulators Greenlight Crypto Funds as Capital for Securities Firms

2 mins
Updated by Ryan Smith

In Brief

  • New regulations in Thailand now allow digital asset firms to include crypto as part of their net capital.
  • Digital asset companies must cap their crypto net capital at 50% of the value of their holdings.
  • Revised net capital laws may see more digital asset firms create their own cryptocurrency exchanges.
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In its latest pro-cryptocurrency stance, financial regulators in Thailand say crypto firms can now include their virtual currency holdings as part of their business capital.
Southeast Asia remains the fastest growing digital market in the world. The onset of the coronavirus pandemic is even serving to accelerate the pace of digitalization in countries like Thailand and Singapore.

Crypto Funds Now Regarded as Business Capital in Thailand

According to the Bangkok Post, digital securities firms in Thailand can now include the value of their crypto holdings as part of their net capital (NC) valuation. The move is part of the revisions to the NC rules enacted by the Thai Securities and Exchange Commission (SEC). The amended NC law arrives following a surge in trading volume for both stocks and futures markets in the country. However, the addition of crypto funds to a company’s NC will be capped at 50%. For the SEC, the move is part of efforts to expand the liquidity management scope of crypto brokerage firms for robust risk management purposes. Consequently, the Commission also included provisions in the NC amendment to cover the security of crypto NC funds. As part of these measures, digital asset firms that offer custodial services must maintain over 1% of the NC funds stored on cold wallets and a further 5% of client assets stored on online wallets. For crypto firms that do not offer custody, shareholder equity must exceed 500,000 baht ($16,500). With the revised NC laws in place, digital securities firms may now have an easier path to launching crypto exchange platforms. According to the Bangkok Post, several companies are already in talks with the SEC to float their own cryptocurrency trading desks. The move to include crypto as capital for businesses is part of a continuing trend of favorable cryptocurrency regulations in Thailand. Indeed, the Southeast Asian nation is witnessing a notable increase in virtual currency and blockchain technology adoption. Back in Oct., the Thai central bank launched an IBM-backed blockchain-based savings bond service. While promoting crypto adoption, authorities also intend to move forward with regulations for industry participants.


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