The Parliament of Thailand has approved an amendment to the existing Securities and Exchange Act, expected to go into effect later this year. Once this happens, it will be legal for businesses to launch security token offerings using blockchain technology.
The spokesperson for Thai SEC has also outlined that the Securities and Exchanges Commission will be able to provide legal clarity on whether or not certain securities can be issued as digital tokens.
The rights and the obligations associated with the digital token, subject of the STO, will determine whether or not it will be regulated under the Securities and Exchange Act and the Decree on Digital Assets.
The decree states that if a financial instrument, i.e. digital token, fits the definition of a security, then it will be regulated under the act.
Last year Thailand established rules which put clear definitions for the terms “cryptocurrencies” and “digital token”, ending the currency vs. security token debate.
The rules holds that “cryptocurrencies” are used as a medium for exchanging goods, whereas “digital tokens” are defined as rights to take part in an investment.
The amended act will also allow businesses to obtain licenses to operate as depositories of securities and digital tokens.
This is something that was previously allowed only for the Thailand Securities Depository Co Ltd, a subsidiary of the Stock Exchange of Thailand (SET).
Thailand’s stock exchange (SET) is considering to apply for a digital asset operating licenses with the Thai Finance Ministry. If approved, SET may start allowing its customers to trade bitcoin and other digital assets by the end of 2019.