The Securities and Exchange Commission (SEC) of Thailand has launched a digital asset regulatory sandbox to facilitate experiments in innovative digital asset services in a real-life context while maintaining a safe environment for all involved. 

The SEC says in a statement that interested parties who wish to test their digital assets-related services are welcome to apply, particularly those developing services that promote innovation in the capital markets under a framework of flexible regulation. Cryptocurrencies and digital tokens are considered digital assets.

While digital assets are banned as a means of payment in Thailand, the SEC has taken a more friendly regulatory approach towards the new asset class, even approving several cryptocurrency exchanges to operate in the country.

These include a joint venture between Binance, one of the world’s largest cryptocurrency exchanges, and Gulf Energy Development. Binance has been banned in several Southeast Asian economies for failing to apply for proper licences to operate. 

The new digital asset sandbox was officially launched on August 9 following an SEC board resolution in March approving its establishment “in principle”. The regulator launched a public consultation in May, which saw respondents responding positively to the proposed measure. 

Services covered by the new sandbox include those from digital asset exchanges, brokers, dealers, fund managers, advisers, and custodial wallet providers. 

“The sandbox participants must incorporate their innovations into the development of digital asset services in the Thai capital market or must participate in a sandbox of the money market regulatory agency,” the SEC says. 

Potential participants must have sufficient capital and proper work systems, management structure, and conditions for relevant operations. This is “to ensure that the participants are well prepared to provide services within the sandbox framework”.

The regulator also calls on potential participants to specify the scope of services that they want to test to reduce risks and widespread impacts that may occur during the one-year sandbox period. Participants may request an extension of the testing period.