Regulations governing securities issuance, which requires underlying assets or service and Know Your Customer (KYC) rules, will be applied to the coming framework governing cryptocurrencies in an effort to protect investors, says Pornchai Thiraveja, an adviser to the Fiscal Policy Office (FPO).
Digital currencies with either underlying assets or services will be tradable to prevent losses from investment, he said. Issuers also need to be licensed in the event that they operate any services that require licences by law.
Trading cryptocurrencies will also have to comply with KYC, Mr Pornchai said.
The regulatory framework for virtual coins is expected to take shape by early March, he said.
Rapee Sucharitakul, secretary-general of the Securities and Exchange Commission (SEC), last week said the working panel tasked with considering potential measures to regulate digital currencies would meet in the next three weeks to consider whether the current laws are sufficient to regulate cryptocurrencies.
The regulations must set standards for information disclosure and transaction reporting, while system security, transaction objectives and utilisation of proceeds arising from initial coin offerings (ICOs) will also come under the regulatory framework, Mr Rapee said.
The working panel's members comprise representatives from the Bank of Thailand, the SEC, the Finance Ministry and the Anti-Money Laundering Office.
Regulators are worried by the rising popularity of fund-raising through ICOs and cryptocurrency trades, as there is no law governing these digital currencies. MAI-listed Project Planning Service Plc is set to unveil Thailand's first securities initial coin offering next month, while J Ventures, a subsidiary of SET-listed Jay Mart Plc, recently sold out its 100 million digital tokens to the general public to raise 660 million baht.
Sakkarin Ruamrangsri, assistant secretary-general of the SEC, said the commission's board of directors is set to consider the ICO regulatory framework on March 8.
Given that cryptocurrencies are not viewed as securities, they will not be under the SEC's supervision, but the working panel from the four agencies is still mulling the regulatory framework, Mr Sakkarin said.