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Thailand Amends Regulation to Give Crypto Businesses More Liquidity

Thailand’s Securities and Exchange Commission (SEC) has announced the revision of its net capital regulation to boost crypto businesses’ liquidity under its regulatory purview. 

According to the SEC, as reported today by Bangkok Post, the move became imperative following the surge in trading volume of both the Stock Exchange of Thailand (SET) and Thailand Futures Exchanges (TFEX) during the U.S. elections. 

At the time, SET’s trading value reached a record high of 166 billion baht in a single day while futures contracts on TFEX spiked to a stunning 1 million contracts per day. 

The SEC hopes to maintain the milestone recorded on these exchanges and further boost liquidity for security firms planning to delve into the business of crypto trading. 

Since more security firms are indicating interest in launching cryptocurrency exchanges due to the industry’s recent rally, the SEC believes it is important to support these businesses.  

The Amendment

Security firms that successfully launch crypto exchanges under the revised rule will be required to store 1% of clients’ funds in cold wallets while at least 5% should be kept on other storage platforms like hot wallets, the report stated.  

Under the new amendment, digital assets-related businesses, including cryptocurrencies, will be required to include the assets’ current value when calculating their net capital funds while adding that:

“The maximum amount calculable for digital assets to a firm’s net capital is 50% of the assets’ value.”  

The revised net capital rule will include a deduction based on an asset’s quality and count digital currencies as capital funds. 

This is not the first time that the Thai government will be amending its laws to boost the region’s crypto industry. 

Last year, Thailand commenced research to study the success and failures of its earlier rules for the country’s crypto space to determine how to amend the regulation while fostering growth.  

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