Thailand has taken a concrete step toward mainstreaming crypto by allowing digital assets to underpin regulated derivatives contracts — a move that could deepen market liquidity and expand hedging options for investors. What happened - On Feb. 10, the Thai Cabinet approved a Finance Ministry proposal to amend the Derivatives Act B.E. 2546 (2003). The change explicitly permits digital assets — including cryptocurrencies such as Bitcoin — to be used as underlying instruments for futures and options traded on regulated venues. - The Securities and Exchange Commission (SEC) will now revise the Derivatives Act and draft the supporting regulations that will set rules for participation, licensing and supervision. How it will work - Under the new framework, exchanges such as the Thailand Futures Exchange (TFEX) can list derivatives whose underlying instruments are digital assets. - The SEC plans to update derivatives business licenses so operators handling digital assets can offer crypto-linked contracts, and will reassess supervisory standards for exchanges and clearinghouses. - Regulators and TFEX will coordinate on contract specifications to reflect the higher volatility and unique risk profile of digital assets, while keeping investor protections and supervisory safeguards central. Why it matters - The change formally recognizes cryptocurrencies as an investable asset class within Thailand’s regulated derivatives market, potentially broadening access for retail and institutional traders and adding risk-management tools for market participants. - Industry participants expect improved liquidity and new hedging capabilities, though many warn capital requirements, disclosure standards and other safeguards will need to scale up to control systemic risk. Additional policy moves - The amendment also reclassifies carbon credits, paving the way for physically delivered futures contracts in addition to cash-settled products — a measure that aligns with Thailand’s draft Climate Change Act and longer-term carbon-neutrality goals. - This reform builds on the framework introduced in 2018 that established rules for digital asset businesses; oversight has since tightened, with stricter operational and investor-protection rules. The Bank of Thailand still prohibits crypto payments. Bigger roadmap and market snapshot - Thailand’s SEC includes crypto exchange-traded funds (ETFs) in its broader 2026 capital markets roadmap; those products would require further legal amendments, but officials have signaled crypto ETFs could launch later this year. - As of August 2025 the SEC estimated Thailand’s crypto market at roughly $3.19 billion, with average daily trading volumes near $95 million and about 230,000 active accounts — a mix of retail investors, foreign entities and domestic institutions. Official line - SEC Secretary-General Pornanong Budsaratragoon said the expansion aims to strengthen cryptocurrencies’ recognition as an investment class, broaden investor access and enhance risk-management tools — while keeping supervisory safeguards and investor protection measures at the forefront. Bottom line Thailand’s move places it among an increasing number of Asian markets adapting regulatory frameworks to accommodate crypto-linked financial products. The practical impact — from contract design to licensing, capital rules and ETF launches — will depend on the SEC’s forthcoming regulations and how market participants respond to the new, regulated derivatives landscape. Image credits: cover image from ChatGPT; BTCUSD chart from TradingView. Read more AI-generated news on: undefined/news