You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 23, 2024

Thailand SEC Amends Supervisory Framework for Ready-to-Use Utility Tokens

Subscribe to Updates

Thailand’s Securities and Exchange Commission (SEC) amended its utility token supervisory framework by issuing seven notifications that came into effect on August 13, 2024. Ready-to-use utility tokens (tokens that can be used immediately to acquire specific goods or services), which were previously unregulated, are now subject to the supervisory scheme set forth by the seven new notifications in both primary and secondary markets. This is intended to provide an investor protection mechanism that responds to the characteristics, risks, and usage of the different types of ready-to-use utility tokens.

Under the new notifications, ready-to-use utility tokens are categorized into two groups. These are detailed below.

Group 1 Utility Tokens

Group 1 utility tokens include ready-to-use utility tokens issued for consumption purposes or as a digital representation of a certificate. Examples include loyalty points, digital movie or concert tickets, NFTs, and carbon credits, among others.

Principally, there is no change in the regulation of group 1 utility tokens under the new notifications. In the primary market, issuance of this type of token is not subject to the initial coin offering (ICO) requirements.

In the secondary market, providing services related to group 1 utility tokens is not considered to be the same as operating a digital asset business with licensing requirements under the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018). Licensed digital asset operators (including exchanges, brokers, and dealers) are not permitted to list or trade group 1 utility tokens.

To provide services in relation to group 1 utility tokens, these licensed digital asset operators must establish a separate entity to provide those services and must not use names or messages that could cause the public to misunderstand that the separate entity is engaged in a digital asset business under SEC supervision.

Group 2 Utility Tokens

Group 2 utility tokens include other ready-to-use utility tokens besides those specified as group 1 utility tokens. Examples include native coins, governance tokens, DeFi/Cefi projects, and exchange tokens, among others.

For group 2 utility tokens, the new notifications impose more stringent regulations, including an ICO requirement if the tokens will be listed on a licensed digital asset exchange.

In the secondary market, providing services related to group 2 utility tokens is considered to be operating a digital asset business that requires a license under the Emergency Decree on Digital Asset Businesses. Therefore, only the licensed digital asset operators mentioned above can list, trade, or provide services in relation to these tokens.

Additional Requirements

The new notifications also emphasize that issuers must not issue tokens to be used as a means of payment (MOP) and must not accept tokens for staking purposes except as a verification mechanism, a voting method, or for joining events for sharing benefits from ecosystem activities. The new notifications further prescribe the characteristics of utility tokens that do not constitute MOP. These include a variety of common utility tokens, such as those that are specially created for loyalty programs or marketing promotion purposes, to purchase in-game items, to pay gas fees for digital transactions, and so on.

Various oversight mechanisms on digital asset exchange supervision were also strengthened, especially in relation to price speculation. These changes include revising minimum requirements for listing rules and trading rules, requiring signposting to inform investors about potential risks from investing in a certain token, and imposing disclosure requirements on issuers when tokens are to be listed on an exchange.

The governance of not-ready-to-use utility tokens remains unchanged under the new notifications, with the issuance of not-ready-to-use utility tokens subject to the ICO requirements.

For more information on these new notifications, or on any aspect of digital assets and cryptocurrency in Thailand, please contact Kobkit Thienpreecha at [email protected], Pornpan Wichawut at [email protected], Napassorn Lertussavavivat at [email protected], or Rujaporn Paritsantik at [email protected].

Related Professionals

Industries

Fintech

Technology

Location

RELATED INSIGHTS​ 

May 2, 2025
Attorneys from Tilleke & Gibbins have updated the latest edition of Doing Business in Thailand, a Q&A-style guide from Thomson Reuters Practical Law that offers an overview of key legal considerations for companies operating in jurisdictions worldwide. The contribution outlines the country’s legal and regulatory framework for foreign investment and business operations and reflects the latest legislative developments. The chapter addresses the following core topics: Legal system: Structure of the courts and the codified nature of Thai law. Foreign investment: Business restrictions under the Foreign Business Act, sector-specific regulations, exchange control rules, and investment incentives. Business vehicles: Overview of partnerships, private and public limited companies, and other legal entities. Employment: Labor protections, employment contracts, foreign worker requirements, and termination procedures. Tax: Corporate and personal income tax, indirect taxes, and tax obligations for residents and non-residents. Intellectual property: Registration and enforcement of patents, trademarks, designs, and copyrights. Data protection: Key provisions of the Personal Data Protection Act and related compliance obligations. Competition law: Regulatory framework under the Trade Competition Act. Anti-bribery and corruption: Relevant legislation and enforcement mechanisms. E-commerce and digital business: Legal regime for online transactions and digital platforms. Marketing and advertising: Consumer protection laws and regulations affecting advertising and marketing practices. Product regulation and liability: Safety standards, liability regimes, and roles of enforcement authorities. Practical Law, a legal reference resource from Thomson Reuters, publishes a range of guides for hundreds of jurisdictions and practice areas. The insurance and reinsurance guide is a valuable resource for legal practitioners, covering numerous jurisdictions worldwide. To view the latest version of the guide, please visit the Practical Law website and enroll in the free Practical Law trial to gain full access.
Read More
April 30, 2025
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
Read More
April 30, 2025
The Bank of Thailand (BOT) is accepting public comments until May 2, 2025, on three draft notifications that will institute an enhanced supervision scheme and impose additional requirements for systemically important retail payment system (SIRPS) operators to align with international standards and encourage open infrastructure and competition. The SIRPS operators will be determined by the BOT from the “designated payment system operators” under the Payment Systems Act B.E. 2560 (2017). SIRPS Designation The BOT will announce a list of payment system operators designated as SIRPS operators and thus subject to enhanced supervision. The BOT will evaluate whether the payment system operator should be deemed a SIRPS operator when it meets the criteria in either the BOT’s quantitative or qualitative assessments, which cover the following: Quantitative assessment: The payment system’s transaction values, market share, cross-border payment network scale and value, and settlement with other financial market infrastructure. Qualitative assessment: The payment system’s function as a part of the country’s payment system infrastructure, the significance of the system users’ roles in the payment services, the substitutability of the payment system, and the impact level on the public and users in the event of an emergency or system suspension. Supervision of SIRPS Business Operations SIRPS operators will be subject to heightened supervision in three areas, in addition to various BOT regulations on designated payment system supervision, as follows: Governance: SIRPS operators will be required to have a balanced board composition with an independent director and directors with varied expertise, establish subcommittees to assist the board in supervising the operator’s compliance with its policy and strategy, and have senior executives overseeing risk and technology security separately from the executives overseeing business operations. Risk management and security: SIRPS operators will be required to have comprehensive risk management to ensure system stability and security. This
Read More
April 28, 2025
In recent years, Vietnam has positioned itself among the leading countries in the world in terms of digital asset ownership and trading volume. This rapid adoption reflects the country’s growing digital economy and the increasing engagement of individuals and businesses in blockchain-based financial activities. Central to this growth are Resolution No. 57-NQ/TW of the Politburo dated December 22, 2024, on breakthroughs in science, technology, innovation, and national digital transformation with a vision to 2045 (“Resolution 57”) and Resolution No. 03/NQ-CP of the Government dated January 9, 2025, promulgating the Action Plan to Implement Resolution 57 (“Resolution 03”), which outline a flexible and innovative policy framework that embraces pilot programs for emerging technologies to lay the groundwork for Vietnam’s legislative framework concerning cryptocurrency and blockchain technologies. Regulatory clarity in terms of digital assets and blockchain technologies is now more critical than ever for businesses and investors. In light of this, Vietnam is currently in the process of introducing three key legal instruments, with drafts of the Law on Digital Technology Industry (“Draft DTI Law”), Resolution of the National Assembly on the Establishment of Regional and International Financial Centers in Vietnam (“Draft Financial Center Resolution”), and Resolution of the Government on the Pilot Implementation of Crypto Asset Markets in Vietnam (“Draft Crypto Pilot Resolution”) nearing promulgation. Current Regulatory Direction and Schedule Vietnam’s regulatory framework for crypto assets and blockchain has been in a developmental stage since 2017, focusing on directions, plans, and schedules rather than established regulations. In February 2024, under Decision No. 194/QD-TTg of the Prime Minister, the Ministry of Finance (MOF) was assigned to draft a legal framework to either prohibit or regulate virtual assets and service providers by May 2025, signaling a clearer regulatory direction. In March 2025, Directive No. 05/CT-TTg of the Prime Minister directed the MOF
Read More