Thailand Develops Distributed Ledger Technology-Based Trading System

Thailand is taking a significant step towards modernizing its securities market by developing a distributed ledger technology (DLT)-based trading system. The Thai Securities and Exchange Commission (SEC) aims to digitize capital markets, including bond trading and securities issuance, through the launch of a DLT-based trading platform.

Digitizing Capital Markets

The planned system is expected to digitize every step of bond trading, from issuance and settlement to investor registration and payments. This will reduce inefficiencies in the traditional process, which can take up to two weeks for bonds to become tradable in the primary market. Additionally, the current system is plagued by accessibility issues and liquidity constraints, limiting investor participation.

According to Jomkwan Kongsakul, the SEC’s deputy secretary-general, manual processes and paperwork delays exacerbate these challenges. A DLT-powered system offers faster transactions, real-time trading, and fractional ownership, making it an attractive solution.

Key Features of the DLT-Based Trading System

The Thai digital securities market will support both electronic securities, which are issued and traded as fully digital assets, and tokenized traditional securities. Firms with existing blockchain infrastructure can operate independent chains, provided they meet interoperability standards. Others can use the SEC’s public chain at a lower cost.

“In the future, there may be multiple chains for trade. Trading through DLT on all systems is connected by a shared ledger, which is expected to be completed soon.”

Approvals and Partnerships

The SEC has already approved four digital token projects under the new system, with two more under review. These projects include green tokens and investment-based products. The regulator is also engaging with other stakeholders to explore tokenization opportunities in areas like soft power funding and sustainable finance.

Thailand’s Push towards Digital Finance

The development of the DLT-based trading system is part of Thailand’s larger push towards digital finance. While crypto payments remain off-limits, the country is exploring other use cases for cryptocurrencies, such as a pilot program announced by Deputy Prime Minister Pichai Chunhavajira to allow foreign tourists to pay with cryptocurrency.

Additionally, Thailand’s government is reportedly considering the idea of issuing a stablecoin backed by government bonds. However, there has been no official confirmation yet.

Last year, the Thai central bank partnered with the Hong Kong Monetary Authority to explore cross-border tokenization projects, with a focus on developing use cases in areas such as trade finance.

Tips for Investors

If you’re interested in investing in Thailand’s digital securities market, here are a few things to keep in mind:

  • Look for firms with existing blockchain infrastructure to ensure interoperability and lower costs.
  • Consider investing in green tokens and investment-based products, which are being reviewed by the SEC.
  • Keep an eye on Thailand’s push towards digital finance and potential developments in the crypto space.

For more news on the cryptocurrency and finance industries, visit Global Crypto News.

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