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Stock Exchange of Thailand Seeks Approval for Security Token Trading

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The Stock Exchange of Thailand (SET) plans to obtain a “Digital Assets Operating License” from Thailand’s Finance Ministry in preparation for its launch of a security token exchange, as reported by the Bangkok Post. To obtain the operating license, SET must demonstrate that it can implement sound front and back office systems and secure token wallets.

Thailand has joined the race with Malta and Singapore to become the leading hub for security token trading over the next few years. Most security token industry observers peg Malta as leading the pack at present, with its regulated security token exchange already being sandboxed by the Malta Stock Exchange. Even so, SET aims to catch up and win the race to be the first stock exchange in the world to launch a regulated security token trading platform.

Pattera Dilokrungthirapop, chairwoman of Thailand's Association of Securities Companies and vice-chairwoman of SET's board of governors, told the Bangkok Post, “Securities companies that are members of the SET plan to apply to become brokers and dealers for digital asset trade on the new exchange. The SET is expected to have an upper hand compared with licensed digital asset exchanges in terms of having large capital and trust”.

SET and its members hosted an investment seminar over the first weekend in February showcasing the outlook for security tokens as a developing industry and the value that the new exchange may add to it.

The security token exchange license would be the second digital asset operating license for SET. Coindesk reported in May 2018 that SET had launched a crowdfunding marketplace, “LiVE,” built on blockchain technology for peer-to-peer trading to help startups access new capital.

With an eye to catching the growing investment trend in digital assets, Thailand issued a royal decree last May that enabled businesses to register as a broker-trader for digital assets. The Finance Ministry is charged with granting crypto operating licenses, while Thailand’s Securities and Exchange Commission is tasked with regulating initial coin offerings, token exchanges, and token brokers under the Emergency Decree on Digital Asset Businesses once a license is issued.

The Stock Exchange of Thailand's move to set up a crypto exchange is part of its three-year strategic plan (2019-2021) for “Creating Partnership Platform to Drive Inclusive Growth” to “slim down costs and broaden business opportunities for the entire capital market industry, aiming to boost efficiency and become Thailand’s one-stop capital market platform.”

In January, Cointelegraph reported that Thailand’s finance ministry had granted digital asset business licenses to four firms: Bitcoin Exchange, Bitkub Online, Coins TH Co., and Satang Pro. Cash2coin and Southeast Asia Digital Exchange (SEADEX) were denied a license on account of insufficient KYC processes and inadequate IT infrastructure. A third application from Coin Asset is still under consideration.

Jay Derenthal is a leading cryptocurrency and blockchain writer. He has extensive business development and growth hacking experience, with a particular interest in the tokenization of assets into tradable securities. Jay uses market research to align his reporting with the most exciting trends in the fast-evolving security token news arena.