The Finance Ministry is set to introduce a stablecoin backed by government bonds, with an initial rollout in a sandbox to test its feasibility, seeking to modernise Thailand's capital market and promote the digital economy, says Finance Minister Pichai Chunhavajira.
Mr Pichai said the Thai stablecoin would be pegged to the baht at a 1:1 ratio. The project is supported by 10 billion baht of government bonds, ensuring price stability while avoiding fluctuations in the currency market.
He said this is not a new fundraising initiative and the ministry already issues government bonds, meaning use as a backing asset will not affect the baht's stability.
The Bank of Thailand and Securities and Exchange Commission (SEC) are in discussions with relevant agencies to facilitate the trial phase through a digital currency sandbox. Once operational, Thai stablecoins are expected to function similarly to Tether's USDT, enabling secure and regulated digital transactions.
Authorities are evaluating different platforms for issuing and using stablecoins, with existing blockchain infrastructure from multiple agencies under consideration. The sandbox phase is expected to launch this year, allowing regulators to redefine legal and operational frameworks.
The ministry previously outlined a policy for the SEC to transform Thailand's capital market into a leading digital token hub. The initiative focuses on tokenisation, including investment tokens, utility tokens and securitised digital assets.
These asset-backed tokens are designed to enhance investor confidence and provide greater convenience for digital investments, while ensuring strong investor protection measures.
To support this transformation, the SEC is expected to streamline regulations for securities firms and asset management companies, as well as financial advisory firms. The goal is to enable these entities to manage digital assets more efficiently, increasing market liquidity and optimising returns for investors.
A significant amount of investor capital remains idle in brokerage and financial institution accounts, generating no returns, said Mr Pichai. To address this, the government is working towards a one-stop authorisation process and a licensing framework.
If regulatory changes are necessary, the ministry pledges to expedite amendments to support the digital asset market, he said.
While Thailand was one of the first nations to enact digital asset laws, it lags global competitors in terms of innovation and adoption. The government wants to ensure these regulations are used more effectively to strengthen investor protection, encourage responsible digital asset entrepreneurship and promote compliance with financial regulations, said Mr Pichai.
The government is committed to supporting investment in asset-backed tokens and digital securitisation, potentially by introducing them in a sandbox environment to gather insights, he said.
Stablecoins backed by government bonds will become a viable investment option for retail investors in the future, said Mr Pichai.
By advancing digital tokenisation and enhancing regulatory support, Thailand is positioning itself as a regional leader in the digital financial ecosystem, he said.
