Thailand introduces sandbox for testing crypto services

Thai financial regulators have officially launched the Digital Asset Regulatory Experimental Zone in an effort to encourage wider adoption of cryptocurrencies in Thailand.

The Sandbox aims to develop the Thai digital asset capital market by allowing participants to test cryptocurrency-related services under flexible regulations.

The initiative follows a decision by Thailand’s SEC in March and a public meeting in May where stakeholders supported the principles of the trial environment and proposed regulatory changes.

This project is important for crypto because Thailand has been gradually introducing pro-crypto initiatives over the past few years. According to Statista, the country’s crypto market is expected to host 7.84 million users by 2025.

In March, the Thai cabinet approved tax exemptions for cryptocurrency profits from investment tokens in a bid 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 types of digital asset services: exchanges, brokers, dealers, fund managers, advisors, and custodial wallet providers. Applicants must demonstrate strong qualifications, such as capital adequacy and robust governance systems, to ensure readiness.

Sandbox covers a wide range of crypto-related business ideas. Asset exchanges act as platforms for crypto trading where maintaining high liquidity and secure transactions is important.

While brokers facilitate transactions between buyers and sellers, dealers typically engage in proprietary trading, which requires strict risk management protocols. Fund managers manage pooled investments in crypto.

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

In each of these services, participants in the trial environment must demonstrate their ability to maintain operational integrity, ensure customer protection and comply with regulatory standards before fully integrating into the broader market.

The testing period within the Sandbox is limited to one year and can be extended.