As tokenization begins in Thailand, the country’s Securities Watchdog announced plans to launch a digital token trading system.
Jomkwan Consakkul, Vice-Chancellor of the Securities and Exchange Commission (SEC), recently revealed that the system will be built on distributed ledger technology (DLT), allowing Thai companies to trade digital tokens efficiently and at a low cost. I did it like that. The project is in its early stages and as it progresses, regulatory changes will be needed to support tokenized securities, she added.
“The SEC is leveraging technology to increase capital market efficiency by promoting the ecosystem. In the future, new regulations will be implemented to promote the issuance of e-securities and online purchase of corporate bonds. will begin,” she said as reported in the local paper, Bangkok Post.
Bond trading in Thailand faces challenges such as non-limiting markets and lack of access, particularly for retailers. Additionally, it will take up to 14 days for bonds purchased from the primary market to be traded on the secondary market. The SEC believes that DLT deployment will solve these challenges and remove boring manual documents that are susceptible to costly errors, into the sector.
Regulators will build public DLT infrastructures, allowing market participants to tap “at reasonable cost.” However, private companies can deploy private blockchain networks, but they must adhere to the SEC’s unified standards for interoperability.
“In the future, there may be multiple chains for trade. Transactions via DLT in all systems are connected by shared ledgers that are expected to be completed soon,” Kongsakul said. It states.
Under the new DLT system, there are two types of securities. Digital native tokens are issued only on blockchain and digital twins of existing traditional products.
Thai companies have fallen into tokenization rapidly over the past few years, and regulators are slowly catching up. Kongsakul revealed that the SEC has approved four tokenization projects and is reviewing two more applications. The other five entities have given preliminary talks with watchdogs and are investigating the feasibility of issuing green tokens.
The SEC’s announcement comes days after Finance Minister Pichai Chunhavajra revealed plans to issue Thai stables backed by government bonds. The goal is to democratize bond investments. The minister said it has been controlled by financial institutions for too long.
Stablecoin will be first issued in a sandbox environment, and upon launch the project will be supported by government bonds worth 10 billion baht ($300 million). The ministry is working on projects with the SEC and other related government agencies, targeting its October launch.
Bank of Thailand (BOT) will also be involved in the Stablecoin project. However, Governor Sethaput Suthiwartnarueput has expressed hesitation on all digital asset projects, including a digital currency payment pilot planned on Phuket’s tourist island.
“The advantages of use cases must be very clear as there are drawbacks to moving to (digital assets),” he told Reuters last week.
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