Thailand Clamps Down on Pioneering Tokenized Bonds—Regulators Spook Innovation

Bangkok’s financial watchdogs just threw sand in the gears of progress—again. The world’s first tokenized government bonds, a landmark fusion of blockchain and traditional finance, now face restrictive measures from Thailand’s regulators.

Progress? More like red tape wrapped in bureaucracy. While other nations race to embrace asset tokenization, Thailand’s authorities seem determined to prove that ’disruption’ still triggers panic in institutional circles.

Here’s the kicker: these bonds represented a trillion-dollar opportunity to modernize sovereign debt markets. But why streamline capital markets when you can bury innovation under compliance paperwork? Classic finance—always finding new ways to protect old monopolies.

G-Token: A World First

The G-Token, announced on May 13, aims to be the world’s first government-issued digital token to raise public funds and help cover its budget deficit.

The government plans to issue $150 million worth of tokens through an ICO portal on July 25, with the Finance Ministry as registrar. Details like interest rate, maturity, and collateral will be announced ahead of its launch.

It will only be available to investors with digital wallets on licensed exchanges or through securities firms.

“Unlike government bonds or equities, a G-Token is not a debt instrument, and therefore it falls under the Digital Asset Act, not traditional public debt laws,” said Jomkwan Kongsakul, deputy secretary-general of the SEC.

Strict regulatory safeguards will apply, including anti-manipulation rules and investor protection, and transfers outside or across exchanges are prohibited, enforced by smart contracts.

“We want to ensure that G-Token serves as a useful, technology-driven investment innovation, not merely a speculative tool,” said SEC secretary-general Pornanong Budsaratragoon.

Thailand’s securities regulator revealed plans to launch a tokenized securities trading system for institutional investors in February.

Thailand Crypto Outlook

There has been a surge in new digital asset trading platforms entering the Kingdom recently, with Binance, Upbit, and KuCoin joining industry leader Bitkub.

Bitkub dominates the market in Thailand with a daily volume of $44.5 million, but the most popular pair is forex with USDT/THB trading, according to Coingecko.

However, accounts on these crypto exchanges are restricted to Thai citizens only, alienating the thousands of expats and foreigners who live in the country, which has ambitions of becoming a digital nomad and crypto hub.

Thailand was also mulling a crypto payments pilot scheme for foreigners on the tourist island of Phuket. However, nothing had materialized six months after the announcement.