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April 30, 2025

Sandbox Projects in Thailand: Innovation for Digital Assets and Finance

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With a favorable crypto climate from the Trump administration in the United States, Thailand is ready for digital asset platforms and has market appetite. This article highlights the country’s regulatory initiatives supporting the growth of digital assets like crypto, stablecoins, and smart contracts, along with efforts to establish clear oversight.

Bank of Thailand Sandbox

Stablecoins used as a medium of payment, particularly those pegged to the Thai baht (THB) for public use, are considered as mirroring fiat currency, which violates the Currency Act B.E. 2501 (1958). These can also be classified as e-money under the Payment Systems Act B.E. 2560 (2017). The Bank of Thailand (BOT) urges issuers to engage in preconsultation prior to implementation, due to concerns about stablecoins being used in place of THB currency. Other FX- or asset-backed stablecoins are not recognized as legal tender under Thai law, and users must bear their own risks.

The BOT recognizes the potential and benefits of these technologies in reducing operational costs for financial service providers and addressing the needs of financial service users. Consequently, the BOT issued a sandbox framework in June 2024. In particular, the enhanced regulatory sandbox allows nonlicensed entities to test financial innovations in controlled conditions. These tests must have a clearly defined duration (usually under one year) and involve a limited user group with an exit strategy. Several programmable payment projects—automated transactions with predefined conditions for the payment of goods and services—were piloted under this sandbox, which closed for applications in September 2024. Eight participants are planning to launch their test runs this year, some of which include asset tokenization or exchange global stablecoins in their programmable payment projects.

Thai Securities and Exchange Commission Sandbox

Given that digital asset businesses fall under the Royal Decree on Digital Asset Businesses B.E. 2561 (2018), supervised by Thailand’s Securities and Exchange Commission (SEC), brokers, dealers, exchanges, investment advisors, and fund managers of digital assets must obtain a license. The Thai SEC also recognizes the importance of these technologies and understands the need for market testing. As such, the digital asset regulatory sandbox was issued in August 2024 to test these innovations. Various private sector entities have applied to participate (around seven participants to date) to test the market without requiring a license at this stage, especially for tourist wallets and programmable payments involving cryptocurrency trading.

Applicants must offer credible, research-backed financial innovations that benefit the Thai capital market or relate to the BOT’s sandbox. Testing is limited to one year with a restricted service scope to minimize risks. Applicants must have sufficient resources, risk management, client service processes, and a clear exit plan, with no prior violations of regulations. However, offering digital tokens (investment tokens or utility tokens not ready for use) still requires approval from the Thai SEC, excluding the approved list of cryptocurrencies that digital asset operators can accept as consideration (i.e., BTC, ETH, XRP, XLM, USDT, USDC, and those used in programmable payments under the BOT Enhanced Regulatory Sandbox). The Thai SEC will not overlap with the BOT’s supervision of stablecoins or cryptocurrencies generated as a medium of payment without underlying projects or activities.

Implications

Parties interested in participating in sandbox projects should be equipped with technological readiness and legal awareness to apply and present their projects to the Thai SEC and consult with the BOT as necessary.

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