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JAN 20, 2024

Regulator lifts investment cap for real estate-backed tokens in Thailand

by CoinNess Global

The Securities and Exchange Commission (SEC) in Thailand has made a significant adjustment to the rules governing digital token investments. The SEC has decided to eliminate the investment ceiling previously imposed on retail investors participating in initial coin offerings (ICOs) tied to real estate and infrastructure.

Fostering digital economy growth and development

The announcement, specifying the revised criteria, was officially published in the Royal Gazette, with the measure taking effect on Tuesday. This move allows retail investors greater access to ICOs involving tokens backed by real estate or linked to real estate revenues.
The SEC emphasized that, in addition to ensuring appropriate investor protection, its role extends to encouraging the utilization of technology and innovation in fundraising. The objective is to foster sustainable growth in the capital market and support the development of the digital economy.
Prior to this adjustment, retail investors faced a restriction of a 300,000 baht ($8,450) investment limit per offering concerning digital tokens backed by infrastructure or real estate. The SEC’s decision to remove this limitation aligns with the goal of managing product risks effectively while promoting a more inclusive environment for retail investors in the realm of digital token investments.

Facilitating custodial wallets

Furthermore, the SEC is currently undertaking a review of criteria to facilitate the establishment of custodial wallet provider businesses for digital asset operators with common major shareholders. This initiative aims to enhance the regulatory framework and provide guidelines for businesses involved in digital asset storage. Custodial wallets will be permitted in Thailand if operated by publicly traded companies with experience in digital asset storage.
All Thai citizens will have a touch point with digital wallets shortly under a government program, a $14 billion digital handout scheme, which has been approved to distribute digital currency to the public through digital wallets.

DASP approvals

As part of its supervisory role, the SEC will also be responsible for granting permissions to digital asset service providers (DASPs) to expand into new business lines. Digital asset operators seeking to diversify their operations are required to obtain approval from the SEC before proceeding. This measure is intended to ensure the effective oversight of such businesses and maintain the credibility of the digital asset industry by preventing illegal operations.
It’s likely no coincidence that tokenized real estate is being embraced in Thailand, given the background of Thailand’s recently installed Prime Minister, Srettha Thavisin. In 2021, Thavisin’s company played a role in funding crypto-friendly investment management firm XSpring Capital to the tune of $225 million. His firm also introduced a real estate-backed ICO in conjunction with XSpring.
While Thailand’s SEC is moving forward with tokenized real estate, it doesn’t feel the same way about exchange-traded funds (ETFs). In the wake of the recent approval of spot bitcoin ETFs in the United States, the Thai SEC responded by stating that it currently has no plans to allow asset managers to launch similar products within the Thai market.
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