Thai crypto business to get liquidity boost following new regulations

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Thailand’s Securities and Exchange Commission has revised its net capital rules regarding digital assets.

According to a Nov. 18 report by The Bangkok Post, the Thai SEC now allows firms dealing with digital assets to include the value of those assets when calculating their net capital funds. 

The new rules follow a surge in volume on Thai exchanges. The Bangkok Post states that, following the United States presidential election, the Stock Exchange of Thailand saw one-day trading value hit $5.5 billion while futures contracts on the Thailand Futures Exchanges increased to 1 million per day. 

The new rules aim to support the rising trading volumes by allowing securities and derivatives brokers to increase their liquidity management. 

According to The Bangkok Post, the new regulations include a deduction based on the quality of the assets. “The maximum amount calculable for digital assets to a firm’s [net capital] is 50% of the asset value,” the report notes.

The SEC also requires securities companies operating digital asset services to maintain more than 1% of customer digital assets in the cold wallets, and more than 5% of assets in online storage systems like hot wallets.

The Thai government has been amending local regulations in order to support the growing domestic crypto industry. In August 2020, the Thai SEC granted four provisional licenses to South Korean exchange UpBit enabling the firm to provide crypto services to customers in Thailand. Last year, the authority approved Seamico Securities’ subsidiary SE Digital as the first initial coin offering portal operator in Thailand.