Thai SEC prepares launch of tokenized securities trading
Thailand’s capital markets supervisory agency, the Securities and Exchange Commission (SEC), is preparing to launch a trading system, built on distributed ledger technology (DLT), to enable securities firms to trade tokenized securities.
Tokenized investments gaining traction
That’s according to a report published on Feb. 3 by Bangkok-based English language newspaper, the Bangkok Post. Jomkwan Kongsakul, deputy secretary-general of Thailand’s SEC, said that tokenized investments are gaining traction. With that, the development will give the regulator experience in supervision of the latest digital-era markets.
The move is also seen as an indication to securities firms of the acceptability of DLT-based tokenized trading from a regulatory perspective in Thailand. The regulator plans to sign off on permitting securities firms to trade digital tokens, bootstrapping digital token trading through accessing the large investor bases of these firms.
Commenting on the initiative, Jomkwan Kongsakul stated:
“The SEC is leveraging technology to enhance efficiency in the capital market by promoting an electronic securities ecosystem,” while “new regulations will be launched to facilitate the issuance of electronic securities and online purchases of debentures.”
Debentures are unsecured debt instruments issued by companies to raise funds.
Efficient primary & secondary market trading
The proposed system will incorporate primary and secondary market trading of fully digitized bonds. Other features will include investor registration and multiple blockchain support with the inclusion of blockchain interoperability capabilities. It is as yet unclear which blockchains the platform will be built around. Speaking on that topic, the SEC executive stated:
“In the future, there may be multiple chains for trade. Trading through DLT on all systems is connected by a shared ledger, which is expected to be completed soon.”
In its preparations to launch the system, the Thai SEC has approved four digital token projects thus far. Two more projects are understood to be at the review stage. The focus is being placed on green tokens and investment-based projects.
The regulator believes that through tokenization, greater efficiency and liquidity can be achieved. There’s a delay of between seven and 14 days before bonds, which have been bought on the primary market, can be traded on a secondary market. Tokenization can help to resolve this issue. Furthermore, where bonds are too expensive for investors or too illiquid, tokenization can help in both cases, broadening access to the range of products available to the investing public.
In addition to this latest news, a number of positive signs have arisen from Thailand with respect to digital assets in recent weeks. It emerged last month that the SEC is considering approving spot Bitcoin exchange-traded funds (ETFs) within the Southeast Asian nation.
Related to that development, SEC Secretary-General Pornanong Budsaratragoon said that the agency has “to adapt and ensure that our investors have more options in crypto assets with proper protection.”
Last month, comments made regarding cryptocurrency by Thailand’s former Prime Minister, Thaksin Shinawatra, were quite positive. He called on the SEC to enable the trading of stablecoins. Since then, Thailand’s Minister of Finance, Pichai Chunhavajira, discussed plans to issue a stablecoin that would be based on the Thai Baht and backed by government bonds.
