Thailand SEC adopts DLT for digital token and Bond trading

February 3, 2025
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Thailand SEC adopts DLT for digital token and Bond trading

Thailand’s Securities and Exchange Commission (SEC) is preparing to launch a debt instrument trading system built on distributed ledger technology (DLT) to enhance the country’s digital securities market. The initiative aims to encourage securities firms to engage in digital token trading while streamlining regulatory oversight in the digital era.

According to a Bangkok Post report, Jomkwan Kongsakul, deputy secretary-general of the Thai SEC, stated that digital token investments are gaining traction, prompting the regulator to advance its market infrastructure.

The regulator has approved four digital token projects and is currently reviewing two more, focusing on green investments and investment-based tokens. In addition, five other parties have held preliminary discussions with the SEC regarding soft power and green token fundraising models.

To capitalize on the growing investor interest in digital assets, the SEC plans to allow securities firms to trade digital tokens, leveraging their extensive customer base to expand the market.

“The SEC is utilizing technology to modernize the capital market, promoting an electronic securities ecosystem that will introduce new regulations to facilitate the issuance and online trading of electronic securities and debentures,” said Ms. Jomkwan.

Currently, buying bonds in Thailand’s primary market takes between 7-14 days before they can be traded in the secondary market. The process is also plagued by high costs, accessibility issues, and liquidity constraints, making it difficult for some investors to participate.

On the issuer side, manual processes and paperwork often lead to delays and errors. The SEC believes that DLT integration will help automate and accelerate these processes, making bond trading more efficient, accurate, and accessible.

The plan includes digitizing the bond trading system across primary and secondary markets, covering settlements, trading, investor registration, and return payments.

According to the report, the SEC envisions a multi-chain environment where companies with their own blockchain infrastructure can operate independently while maintaining interoperability through a standardized framework. Firms without their own infrastructure will have the option to use the SEC’s public chain at a reasonable cost.

“In the future, there may be multiple chains for trading, all connected through a shared ledger. We expect this infrastructure to be completed soon,” Ms. Jomkwan stated.

The SEC’s initiative will introduce two types of securities issuance. The first is digital-native securities, which originate and trade exclusively on a blockchain. The second is tokenized traditional securities, where existing financial instruments will be converted into digital assets for secondary trading on DLT platforms.

This DLT-based system will enable fractional trading, lower trading costs, improved liquidity, real-time transactions, and streamlined settlements, Ms. Jomkwan noted.

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