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Thailand sees DeFi as promising investment mode but it is possible only once the projects under DeFi are licensed under the regulatory authority of the country. SEC has given a hint that it might regulate the DeFi projects and issuance of any digital token.
The boom in cryptocurrency is evident worldwide. But with this boom, fraudulent activities, crimes are also bound to increase. So, in order to regulate the cryptocurrency industry, financial regulators from Thailand have started showing interest towards decentralized finance or popularly known as DeFi.
Thailand’s Securities and Exchange Commission (SEC) has given a hint that it might regulate the DeFi projects as well as the issuance of digital tokens. While addressing the media on Sunday, the regulator said that DeFi activity including digital tokens like liquidity provider tokens, governance tokens or tokens issues to those dealing in DeFi projects must have a license and abide by the specified rules.
The new regulatory decision has come only after the launch of the native token Tuktuk finance, for Thai DeFi protocol. The native token has been launched on the smart contract platform operated by Bitkub, a local crypto exchange in Thailand.
As per the law, the digital tokens that are issued must be authorised by the SEC. The issuer has to disclose information and other digital assets through token portals licensed under the Digital Asset Business Emergency Decree.
The law also stated that the crypto exchanges, digital-asset brokerages, dealers, investors, advisors and private fund managers all should have the license by the Ministry of Finance.
Tuktuk Launch
As the native token Tuktuk was launched on Sunday, the price of the token went quite high before it plummeted below $1within minutes. As per the platform’s website, the platform has attracted a total value locked to $18million. The Tuk token was last trading at $1.93 to give the project a market cap of $7.1 million.
Moving towards new territory
It is the first time that regulatory authorities are targeting DeFi. They have advised each trader to study DeFi projects before investing in it. The trader should check whether the service provider is a digital-asset business that is licensed and regulated by the SEC.
The tokens must also be authorised by the SEC and the issuer has to share the information and offer the coins through the token portals licensed under the Digital Asset Decree.
Banks looking towards DeFi
Centralized banks are among those that have welcomed DeFi in Thailand. Thailand’s fourth largest bank by assets, Kasikorn (KBank) is on an exploration spree with a project on DeFi. in partnership with the Stock Exchange of Thailand, the project Kubix has been set up to run an initial coin offering (ICO) portal for digital tokens.
Siam Commercial Bank has also announced plans to invest in a $50 million fund in February
Crypto adoption in Thailand has been increasing to almost 600% since last November. DeFi has also gained prominent attention from the investors and it is interesting to know that the country ranked second in the world by search traffic for the keyword decentralized finance.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
