On Friday Thailand’s Securities and Exchange Commission (SEC) opened applications for its Digital Asset Regulatory Sandbox. As with most sandboxes, the aim is to explore innovations in the sector which may not currently be allowed by legislation.
The term “digital asset” is often usually broadly, but has a specific meaning in Thailand. It includes both cryptocurrencies and digital tokens. Cryptocurrencies are classified as being used as a medium of exchange. In contrast, the feature of a digital token is it grants rights. It might be an investment token that provides rights in a project or business or a utility token used to receive goods, services or other rights. Thailand has specific rules for real estate tokens.
The sandbox covers both types of tokens and six roles:
- Digital Asset Exchange
- Digital Asset Broker
- Digital Asset Dealer
- Digital Asset Fund Manager
- Digital Asset Advisor
- Digital Asset Custodial Wallet Provider
In order to take part in the sandbox, applicants have to have sufficient capital and adequate management and systems in place.
Given the potential riskiness of trials that stretch the current regulatory perimeter, they need to be limited in scope. That means potentially limiting the type of customers served, or the number of customers or the total investment.
The trial period will be up to one year but sandbox participants can apply for extensions.
In other related news, in June the Bank of Thailand launched a regulator sandbox for DLT-based programmable payments.
