Thailand introduces sandbox for testing crypto services

Thai financial regulators have officially launched a Digital Asset Regulatory Sandbox to promote broader crypto adoption in Thailand. 

The sandbox allows participants to test crypto-related services under flexible regulation, with the goal of developing the Thailand digital asset capital market.

The initiative follows a March resolution by the Thai SEC and a subsequent public hearing in May, where stakeholders supported the sandbox’s principles and proposed regulatory amendments.

This project is important to crypto because Thailand has gradually introduced pro-crypto initiatives over the last few years. According to Statista, the country’s crypto market is expected to be home to 7.84 million users by 2025. 

In March, Thailand’s cabinet approved a tax exemption on crypto earnings from investment tokens to boost the country’s digital finance competitiveness, and the Thai SEC recently approved the country’s first spot Bitcoin ETF.

Details of the sandbox

The sandbox covers six digital asset service types: exchanges, brokers, dealers, fund managers, advisors, and custodial wallet providers. Participants — who must apply for the program — are required to demonstrate strong qualifications, such as capital adequacy and robust management systems, to ensure readiness.

The sandbox encompasses a wide range of crypto-related business ideas. Asset exchanges act as platforms for trading crypto, where maintaining high liquidity and secure transactions is key.

Brokers facilitate transactions between buyers and sellers, while dealers often engage in proprietary trading, necessitating stringent risk management protocols. Fund managers handle pooled investments in crypto.

Advisors provide expert guidance on digital asset investments, in-depth market analysis, and regulatory knowledge. Wallet providers safeguard digital assets with advanced cybersecurity measures.

In each of these services, participants in the sandbox must prove their ability to maintain operational integrity, ensure customer protection, and comply with regulatory standards before they are fully integrated into the broader market.

The testing period within the sandbox is limited to one year, with the possibility of extension.