The SET says it will build a comprehensive digital asset ecosystem around the new platform as part of its digitalisation strategy, as the country approves its first ‘ICO portal’.
The SET (Stock Exchange of Thailand) has expects its new digital asset platform to commence trading in 2020, as part of a new ecosystem it says will be a turning point for Thailand’s capital market.
According to the Bangkok Post, designing the digital asset exchange will take 3-4 months to complete, and the building of core infrastructure is expected to conclude in Q3.
Under a royal decree on digital assets that took effect on 14 May 2018, the SET will need to apply for licences to operate services for a digital exchange, as do brokerage firms and dealers. In January, the SET said it planned to apply to the Finance Ministry for a licence to setup a new digital asset exchange in collaboration with its members.
Token portal service providers, or ICO portals – which help screen ICOs, conduct due diligence, prove smart contract source codes and verify KYC processes – also need to be approved by the SEC (Securities and Exchange Commission).
According to reports, the SEC has finalised its approval for the first authorised ICO portal, an unnamed foreign company, having conducted pre-consultations with 7-8 companies that were seeking to operate ICO portals.
While the first authorised ICO portal has not been named, there is some speculation that it may be Bitpoint Japan, which was known to be pursuing such a licence in Thailand. Bitpoint Japan is currently the only foreign company approved to operate digital currency businesses in the country.
Along with the new digital asset exchange, the SET plans to work with capital market stakeholders to build a new ecosystem that supports digital assets by creating structures for core infrastructure, such as the issuing process, asset tokenisation, trading systems, settlement systems, e-wallets and custody.
The digital asset exchange and planned ecosystem will serve all types of digital asset products, including cryptocurrencies, digital tokens, ICOs and STOs (securities token offerings). In a related move, the SEC said it will soon issue criteria for STO issuances.
The SET is plans to host a meeting with stakeholders on 27 March to discuss ideas on the new digital asset exchange. Market regulators, banks, securities firms, asset managers, issuers, custodians and fintech firms are all expect to join.
Digitalisation of capital market infrastructure was set out as a key priority for the SET in its three-year strategic plan, revealed last month. This year, it plans to enable paperless account opening through electronic ID verification, electronic payment of stamp duty, direct-debit registration processes, and interbank payments for capital market services.
Also this year, the SET’s FundConnext mutual fund platform, which currently links 19 fund managers in Thailand, will be connected to Clearstream-operated fund processing platform Vestima. The agreement to link the two platforms was announced last October, to enable foreigner investors access to domestic funds. FundConnext customers in Thailand will likewise be able to access the international funds market through the link.
The SET’s digitalisation strategy is aimed at making investor experiences faster and more convenient, as well as “opening up new investment opportunities.”