- Thailand recently outlined its plans for regulating the DeFi space in the country
- DeFi platforms will have to register with the Minister of Finance and offer token sales through official portals
- Such portals could become the norm in years to come
The advent of DeFi has been seen by some as the next stage in the fight to stay one step ahead of cryptocurrency regulators. However, the news that the Thai Securities and Exchange Commission (SEC) intends to start regulating certain aspects of the DeFi system offers an intriguing insight into how authorities worldwide may deal with the decentralized system.
Thai SEC Sets Up Official DeFi Portal
The Thai SEC announced over the weekend that tokens issued by DeFi projects “must be licensed and abide by the specified rules”, meaning that all projects need to be registered with the Thai SEC before issuing tokens. This ruling comes under the Digital Asset Business Emergency Decree, which requires DeFi projects to disclose information on the project and offer digital assets through official portals licensed under the terms of the decree.
The decree also requires digital asset operators, including exchanges, digital asset brokers, dealers, private fund management firms, and digital asset advisors to be licensed by the Minister of Finance, with failure to comply contravening the 2018 Digital Assets Act.
Other Countries Looking On
Thailand is the first country to target DeFi as a sector in terms of regulation. As a small nation it has a small footprint in the DeFi world and as such will find it easier to enact such legislation as portals for DeFi projects to operate through. These official portals could offer a glimpse into the future of DeFi regulation, with other countries potentially looking on in order to judge the efficacy of such a program.
However, extrapolating these methods to countries ten times the size of Thailand, and then having systems in place to catch and prosecute those who skirt those laws, is a far harder challenge. Other countries could do with taking steps to follow Thailand’s approach sooner rather than later however due to the fact that, as acting U.S. comptroller of the currency recently noted, regulating a market becomes harder the bigger it gets.