Bitcoin rises above $80K after jumping 20%+ last week, its biggest three-day gain since 2023; US spot bitcoin ETFs had $1.92B in net inflows last week (Lee Ying Shan/CNBC)

Thailand's Securities and Exchange Commission (SEC) is advancing its framework for locally listed spot Bitcoin and Ether ETFs, as well as revising its approach to foreign digital asset custodians. The regulator is currently seeking feedback on two consultation papers: one outlining draft regulations for crypto ETFs, and the other proposing principles for the qualifications of foreign digital asset custodians.

Initially, asset managers will be able to create passive ETFs tracking Bitcoin (BTC) or Ether (ETH), which are the only two eligible crypto assets for ETFs. The proposed rules would only allow Bitcoin and Ether ETFs to trade on the Stock Exchange of Thailand (SET), with each ETF required to maintain at least an 80% average net exposure to the underlying asset each accounting year.

Mutual and private funds will be allowed to invest in Thai-domiciled crypto ETFs, as well as foreign crypto ETFs that they are already permitted to invest in, within existing investment limits. However, during the initial phase, alternative products tied to foreign crypto ETFs, such as depositary receipts tracking them, will not be permitted.

The SEC envisions onshore digital asset custodians as the primary providers for crypto ETFs during the initial phase, but may permit the use of qualified foreign custodians under certain circumstances. Public comments on both consultation papers will be accepted until September 20.