Thai Authorities Allow Bitcoin Speculation
Futures Trading Firm Gets the Green Light
Thai investors will now be allowed by Philip Securities Thailand to speculate on Bitcoin through a global derivatives trading service. To make things even better, the Thai authorities agree that this move is within the law. With such a service, investors in Thailand willbe able to invest in Bitcoin futures on the Chicago Mercantile Exchange and the Chicago Board Options Exchange.
Bitcoin futures were first allowed on two of the world’s major exchanges for derivatives in mid-December in 2017. According to the MD, Low See Kiong, Thai investors have expressed a great interest in futures. They are also ready to accept the risks that come with futures trading.
Mr. Low added,
Using bitcoin as an underlying asset on the CBOE and CME will lead to greater acceptance of bitcoin futures as they have reliable payment systems and are regulated by the US Securities and Exchange Commission.
He said the futures would be targeted at experienced investors who had an interest in Bitcoin, but did not want to purchase it, or websites that have no security licenses. The head of global markets at Phillip Securities Thailand, Apisak Vongvanij, said that customers who used the global derivative service would be able to trade futures on 15 global futures markets. These customers would also be able to trade on CME and CBOE. All trading would be quoted in US dollars.
At the CME, trading size will be larger than the CBOE because of the larger underlying assets. On CBOE, Bitcoin futures trading relies on one unit of Bitcoin, while on CME, it is five.
When Mr. Apisak was asked about the minimum amount investors need to stake for a single Bitcoin futures contract, he said that it would be quite difficult to calculate. This is mainly due to the high volatility that Bitcoin often experiences. Even underlying conditions in a single day could have a major impact on the price of Bitcoin, thus affecting the minimum amounts. For instance, he gave the example of CBOE, where the minimum margin has varied from $13,000 to $20,000 in just a few weeks.
The US Commodity Futures Trading Commission supervises all Bitcoin futures on CME and CBOE. The Thai securities company is able to allow overseas investors the option to invest there, since the International Organization of Securities commissions regulate markets.
Thus, investors do not have to worry about the risk of fraud or engaging in money laundering unwittingly, because of the tough regulations. The only thing they have to worry about is the amount of risk inherent in the products. These risks include readiness to increase liquidity to meet the need to cover collateral for underlying assets daily, high volatility, and how Bitcoin is used as a leverage investment product. The President of the Stock Exchange of Thailand said that Phillip Securities has provided Thai investors with an opportunity to invest overseas without any restrictions on their investment assets.
In the meantime, the Finance Ministry recently issued a warning saying that Bitcoin companies run the risk of being involved in fraud. If found guilty, those involved are subject to 5-10 years in jail and a 500,000 to 1 million baht fine plus a daily fine of 10,000 baht.
Image Credit: Deposit Photos
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