G-Token Implications and Risks for the Financial System Under State-Issued Digital Instruments in Thailand

Abstract

As governments increasingly explore digital financial instruments to diversify funding channels and expand citizen participation, Thailand’s G-Token represents an early attempt to integrate blockchain technology into sovereign debt issuance. This study examines its potential implications through a multi-dimensional risk and governance framework, situating the analysis within both domestic regulatory structures and international benchmarks. The evaluation considers macroeconomic effects—such as potential shifts in monetary policy transmission, bank disintermediation risks, and systemic liquidity impacts—alongside micro-level concerns involving investor protection, market integrity, and financial literacy. Using comparative analysis with the European Union, Singapore, and United States regulatory approaches, the paper identifies critical gaps in legal classification, oversight maturity, and structural safeguards. Findings indicate that while Thailand’s design—particularly its separation from payment systems—supports monetary coherence, its ad hoc legal integration, reliance on administrative investor protections, and early-stage market infrastructure pose vulnerabilities if adoption scales. The study concludes that achieving long-term viability will require explicit statutory authorization, enhanced disclosure and governance standards, strengthened interagency oversight, and inclusive market access strategies. These insights provide a structured basis for emerging economies seeking to adopt government-backed tokenized instruments without undermining financial stability or public trust.

1. Introduction

State-issued digital financial instruments have rapidly gained prominence as governments explore innovations like central bank digital currencies (CBDCs) and tokenized government securities to enhance financial efficiency and inclusion (Jain & Gabor, 2020; Ozili, 2023). This shift reflects both technological change and the rise in private digital assets, prompting authorities to modernize fiscal and monetary tools (Carapella et al., 2023; OECD, 2025). Sovereign digital instruments are emerging globally, such as Slovenia’s blockchain-issued bond launched in 2024, which demonstrates how distributed ledger technology can transform public debt management (Bohinc, 2024). Against this backdrop, Thailand is piloting the “G-Token” (dubbed a “Government Token”), a state-backed digital investment token classified under the Public Debt Management Act B.E. 2548 (2005) as borrowing “by other means.” ‘Token’ here denotes tokenized securities/public debt recorded on Distributed Ledger Technology (DLT), not privately issued cryptocurrencies. Under Thailand’s framework, G-Token is treated as an investment token with sovereign credit risk, not as a medium of exchange. Functionally, it mirrors government bonds—paying periodic interest and principal—yet operates on a blockchain platform. By lowering investment thresholds and using mobile channels, the G-Token seeks to democratize access to government securities and foster a culture of saving among citizens previously excluded from bond markets. Regulators have tailored new rules for their issuance and trading, highlighting investor protection and market integrity as core priorities (SEC Thailand, 2025b).

However, the initiative raises significant risks. Widely accessible sovereign-backed digital assets may alter monetary policy transmission, disintermediate bank deposits, and destabilize the two-tier banking system during stress events (SEC Thailand, 2025a). Cross-border interoperability could amplify capital flow volatility and challenge monetary autonomy (Chu & Rathbun, 2025). Moreover, the hybrid nature of state-issued tokens blurs legal categories—public debt, securities, and digital assets—creating regulatory uncertainty. Thailand’s Public Debt Management Act predates digital finance, while the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018) was designed for private markets, leaving gaps in statutory authority and investor safeguards. Concerns also extend to transparency and investor confidence. Questions persist about collateralization, redemption guarantees, and whether G-Token resembles low-yield deposits rather than genuine market instruments. Such ambiguities highlight the absence of clear frameworks in emerging markets for managing systemic risks, investor behavior, and regulatory oversight of sovereign digital tokens. For avoidance of doubt, G-Token is not a cryptocurrency or a general-purpose digital currency: it is a sovereign debt instrument in tokenized form, issued by the Ministry of Finance (MoF), with transfers restricted to authorized venues and use as a means of payment prohibited. Its economic profile, therefore, aligns with short-term government bonds, not with privately issued crypto-assets.

This article addresses the research question: What are the financial system implications and regulatory risks of introducing G-Token in Thailand? It evaluates potential impacts on banking stability, capital markets, monetary policy, and retail investors while identifying governance gaps that must be managed for successful implementation. Drawing on lessons from CBDC literature, tokenized finance, and international best practices, the article proposes an evaluative framework to balance innovation with systemic stability. Thailand’s case holds broader relevance for other jurisdictions considering similar tools. Global authorities stress that financial innovation must be accompanied by robust regulation, legal clarity, and risk governance (Van Greuning & Bratanovic, 2020). This review offers a grounded analysis of G-Token’s opportunities and risks, contributing policy insights for emerging markets seeking to modernize public finance responsibly.

2. Materials and Methods

This study uses a qualitative, document-based review combined with normative legal analysis, drawing on Thai legal doctrines, policy documents, and international guidance. Primary sources include the Public Debt Management Act B.E. 2548 (2005) and the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018), which together outline the domestic legal framework for G-Token. The analysis examines how the MoF derives borrowing authority for digital instruments and how the Securities and Exchange Commission of Thailand (SEC) regulates their issuance and trading, including draft regulations and consultation papers that explain exemptions, investor protections, and secondary market rules. These two statutes together establish only partial authority for G-Token issuance, highlighting statutory frictions when adapting laws designed for conventional debt or private digital assets to a hybrid sovereign instrument.

To situate Thailand’s approach within global norms, this study draws on the regulatory principles articulated by the Bank for International Settlements (BIS) and the Financial Stability Board (FSB)—two leading global standard-setters in financial governance. The BIS emphasizes that while tokenization holds promise for increasing market efficiency and financial innovation, it also introduces risks that require robust oversight, governance, and infrastructure safeguards (Bank for International Settlements [BIS], 2023). Similarly, the FSB promotes the principle of “same activity, same risk, same regulation,” urging jurisdictions to ensure that digital financial instruments—such as government-issued tokens—offer the same level of investor protection, transparency, and systemic risk safeguards as their conventional equivalents (Financial Stability Board [FSB], 2023). These frameworks serve as a benchmark to evaluate whether Thailand’s G-Token model aligns with global expectations for legal clarity, operational security, and macro-financial stability.

The research adopts a normative legal lens, interpreting how current statutes apply to state-issued digital instruments and evaluating whether regulatory or doctrinal gaps exist. It further benchmarks Thailand’s regulatory stance against international principles, assessing whether safeguards—such as licensing waivers, disclosure rules, and trading restrictions—are consistent with global guidelines proposed by the BIS and the FSB, as well as with insights drawn from the development and implementation of CBDCs and tokenized government bonds in other jurisdictions (OECD, 2020b; Aldasoro et al., 2025). This approach emphasizes what the legal and policy framework ought to be, rather than merely describing what currently exists.

There are, however, clear limitations. The G-Token remains in its early rollout stage, with no operational data yet available on market performance, investor behavior, or systemic impacts. Accordingly, the analysis is conceptual rather than empirical, relying on official design documents and analogous case studies rather than real-world outcomes. Neither stakeholder interviews nor transaction-level data were possible at this stage, as adoption has not yet generated an evidence base for such research. Scholarly literature specific to G-Token is currently scarce, prompting this study to engage broader legal and financial literature on digital assets, sovereign e-bonds, and public tokenization programs. These constraints render the findings preliminary—they highlight emerging risks, policy design concerns, and governance needs rather than offering definitive regulatory prescriptions.

Despite these limitations, a document-based normative review remains appropriate for an exploratory analysis of a novel financial instrument. By grounding the study in authoritative legal texts and international regulatory frameworks, the research builds a principled foundation for evaluating G-Token. The evaluative criteria—transparency, risk management, and regulatory adequacy—draw directly from BIS and FSB guidelines but are adapted to Thailand’s emerging-market context, where heightened market volatility and evolving regulatory capacity require particular vigilance. Accordingly, the present study should be understood as a preliminary contribution, providing a conceptual foundation for future empirical research once G-Token adoption generates operational and investor-level data.

3. Results

3.1. Strategic Rationale for State-Issued Digital Financial Instruments

Governments and central banks worldwide are increasingly adopting digital financial instruments to modernize public finance and preserve monetary relevance in the face of technological disruption. These innovations include CBDCs, tokenized government bonds, and other sovereign-issued tokens. CBDCs—digital forms of central bank money—are primarily designed to reinforce monetary sovereignty, enhance payment efficiency, and promote financial inclusion at a time when cryptocurrencies and stablecoins challenge the role of fiat currency (Bank for International Settlements [BIS], 2020; International Monetary Fund [IMF], 2024). Alongside these, some jurisdictions have explored sovereign-issued digital tokens outside central bank balance sheets, such as the Marshall Islands’ planned “Sovereign” (SOV), which underscored the regulatory and monetary challenges of operating in untested environments.

A related innovation involves tokenized public debt, where governments issue bonds in digital form using distributed ledger technology. Tokenized bonds have been piloted in Germany, France, Australia, Singapore, and by the World Bank, with cumulative issuance exceeding USD 4 billion (Aldasoro et al., 2025). These pilots demonstrate potential benefits such as reducing issuance and settlement costs, improving transparency, and broadening access for retail investors. Tokenization also complements CBDCs by integrating sovereign bonds and digital money within unified infrastructures, a direction the BIS envisions for next-generation financial systems (OECD, 2020b; Uzsoki, 2019).

While motivations vary, central banks and fiscal authorities pursue these instruments for distinct but overlapping reasons. Central banks emphasize maintaining monetary sovereignty, ensuring effective transmission of policy rates, and enhancing payment resilience, particularly in economies exposed to private digital currencies. Fiscal authorities, by contrast, prioritize modernizing public borrowing, lowering participation thresholds, and promoting inclusion by enabling households to access government securities more easily. Tokenization also signals technological modernization and can strengthen trust, deepen capital formation, and reduce transaction frictions in emerging markets (Uzsoki, 2019; OECD, 2020b).

Thailand’s G-Token initiative reflects these fiscal motivations. Officials emphasize that it is an investment instrument, not a payment token, with trading confined to licensed venues and off-platform transfers disabled. Substantively, the claim on the state and the risk profile mirror short-tenor Thai government bonds; the main differences lie in issuance and settlement rails, distribution channels, and lower subscription thresholds (SEC Thailand, 2025b). Therefore, it is explicitly framed as an investment product rather than a general-purpose currency, thereby aligning more closely with tokenized government bonds than with CBDCs or private cryptocurrencies.

Comparative note with conventional Thai government bonds. In both cases the issuer and credit risk are sovereign (MoF), principal and interest obligations are fixed ex-ante, and instruments are held for investment rather than used as money. G-Token differs primarily in market infrastructure (DLT ledger and smart-contract settlement), distribution (retail-first, mobile channels with low minimums), and venue constraints (authorized platforms; no P2P transfers). It is, therefore, more appropriately compared to Thai government bonds than to cryptocurrencies or stablecoins.

At the same time, the initiative underscores potential tensions between fiscal and monetary objectives. Expanding retail access to government securities may advance savings and inclusion goals, but large-scale adoption could pose risks to bank intermediation, liquidity management, and monetary control. The strategic rationale for state-issued digital instruments, therefore, is not only about broadening participation but also about carefully balancing innovation with systemic safeguards and institutional clarity to maintain both legitimacy and stability.

3.2. Macroeconomic and Microeconomic Implications for Financial Systems

State-issued digital currencies and tokenized public instruments create both opportunities and risks for financial systems, with effects spanning macroeconomic stability and micro-level behavior. At the macro level, these tools could reshape monetary policy transmission. Research suggests that well-designed CBDCs can reduce frictions in deposit markets, improve the pass-through of policy rates, and expand financial inclusion, particularly in cash-heavy or informal economies (Barrdear & Kumhof, 2016; Bank for International Settlements [BIS], 2020). By offering a risk-free and accessible digital payment option, CBDCs may enhance the central bank’s capacity to manage aggregate demand.

Yet these benefits are offset by risks to financial stability. A widely adopted retail CBDC or sovereign token could erode banks’ deposit base, triggering disintermediation, tighter credit supply, and volatility in short-term funding (Keister & Sanches, 2023; International Monetary Fund [IMF], 2024). In times of stress, state-backed digital assets could amplify bank-run dynamics as depositors shift rapidly into perceived safe havens. To mitigate this, central banks propose design features such as holding limits, tiered remuneration, or non-interest-bearing models to preserve the two-tier banking system (Bank for International Settlements [BIS], 2021). Tokenized government bonds, while not central bank liabilities, may create similar quasi-cash effects if they divert household savings from banks to direct sovereign investments. Without clear regulatory coordination, such innovations could weaken traditional monetary control mechanisms.

At the micro level, digital public instruments can improve access to finance for underserved populations. By lowering entry barriers and reducing transaction costs, they enable unbanked households to engage in digital payments, savings, and government investment schemes (World Bank Group, 2023). In developing economies, this can strengthen financial inclusion and trust in public finance. However, risks at the individual level are significant. Retail users with limited financial and digital literacy may misunderstand product features, engage in speculative behavior, or fall victim to fraud (Lusardi & Mitchell, 2014). Regulators must therefore pair innovation with investor education, clear disclosure, and suitability checks. Tokenized bonds may also introduce unfamiliar dynamics—such as secondary market trading, platform-based settlement, and pricing volatility—that traditional bondholders are unaccustomed to.

Financial intermediaries face structural adjustments as well. Banks may lose stable deposits and shift toward wholesale funding or fee-based services, while payment processors and depositories risk being displaced by blockchain-enabled settlement. Yet these changes also create opportunities: banks and intermediaries can integrate into the digital value chain by offering custody, KYC, advisory, and distribution services for state-issued tokens, maintaining relevance in a digitized ecosystem. In essence, macro and micro effects are interdependent. Large-scale disintermediation (a macro issue) is driven by millions of individual behavioral choices shaped by trust, convenience, and risk perception. Policy responses must therefore balance systemic stability with human-level adoption patterns. Without a holistic design, well-intentioned digital instruments could yield unintended destabilizing outcomes.

3.3. Regulatory Challenges and International Governance Norms

State-issued digital instruments blur the traditional lines between currency, deposits, and securities, creating complex regulatory challenges. Globally, regulators and standard-setting bodies emphasize that such innovations must not weaken safeguards for financial stability, integrity, or consumer protection. The BIS-led coalition of central banks has underscored a guiding principle for CBDC design: it should “do no harm” to monetary and financial stability (Bank for International Settlements [BIS], 2020). Similarly, the International Monetary Fund (IMF) advises that CBDCs meet the same resilience standards as critical payment systems, requiring strong operational, cyber, and fraud controls (Tourpe et al., 2021). Best practices increasingly treat sovereign digital currencies as critical national infrastructure, demanding equal or higher scrutiny than core banking and payment networks (Chen et al., 2022).

Legal clarity is another pressing concern intertwined with these stability safeguards. Existing laws on currency, banking, and securities were not written for digital tokens, requiring updates or entirely new regulatory frameworks. For example, the European Central Bank (ECB) noted that a digital euro would require explicit legal authority under EU law (Grünewald, 2023), while the IMF recommends reviewing central bank statutes before introducing sovereign digital currencies. Tokenized bonds face similar ambiguity: are they governed by securities laws, payment laws, or bespoke frameworks? Many jurisdictions favor the “same activity, same risk, same regulation” approach, applying traditional investor protection and disclosure standards to tokenized bonds (Financial Stability Board [FSB], 2023). Yet, some governments exempt their own tokenized debt from certain registration rules, treating them like savings bonds rather than full market offerings (Bank for International Settlements [BIS], 2023). This lack of harmonization risks creating legal grey zones where issuance, custody, or secondary trading may fall outside clear statutory oversight.

Anti–money laundering and counter-terror finance (AML/CFT) compliance adds another layer of complexity to the legal and operational framework. Poorly designed digital instruments can be exploited for illicit finance, with international precedents showing the reputational and policy consequences of inadequate safeguards. The Marshall Islands’ planned SOV token triggered IMF warnings over compliance with Financial Action Task Force (FATF) standards and forced authorities to delay issuance until robust mechanisms were in place (International Monetary Fund [IMF], 2018; FATF, 2021). Such cases highlight how international cooperation and adherence to global norms now directly shape national decisions, underscoring that sovereign innovation cannot proceed in isolation from cross-border regulatory expectations.

In response to these challenges, risk governance frameworks are evolving through pilots, regulatory sandboxes, and public consultations. China’s phased e-CNY rollout, the Eastern Caribbean’s DCash pilot, and the ECB’s and Bank of England’s discussion papers illustrate a cautious, iterative approach to deployment (Chen et al., 2022; Grünewald, 2023). Common safeguards emerging from these pilots include stringent cybersecurity testing, privacy protections aligned with domestic data laws, holding or transaction caps to manage adoption and mitigate run risks, and clear liability mechanisms for user losses. Even where a CBDC is issued directly by a central bank, private intermediaries often play a role in distribution, requiring tailored oversight of their activities (Adrian & Mancini-Griffoli, 2021).

3.4. Thailand’s Regulatory Response

Thailand’s G-Token initiative represents a pioneering attempt to raise government funds through a blockchain-based investment token rather than traditional bonds. While innovative, it has exposed significant gaps in the existing legal and regulatory framework, prompting authorities to adapt in real time. A central ambiguity lies in its legal classification. Economically, G-Token is a government debt obligation, yet it does not resemble a conventional bond. It was enabled under the Public Debt Management Act’s clause permitting “loan raising by other means,” and the SEC chose to regulate it under the Digital Asset Decree—originally designed for cryptocurrencies—rather than under securities law. This effectively treated G-Token as a special category of digital investment token, with the MoF as issuer and the SEC overseeing issuance and trading. The absence of a dedicated legal category for government-issued digital tokens underscores the structural reform still needed to align such innovations with Thailand’s broader public debt and capital market regimes.

To accommodate G-Token’s hybrid nature, the SEC initiated a public consultation in 2025 and proposed tailored rules. These included exempting the token from standard prospectus filing and Initial Coin Offering (ICO) portal requirements, and allowing licensed brokers and exchanges to handle transactions without obtaining new licenses. Such exemptions mirror how sovereign bonds are typically treated, yet they highlight the ad hoc nature of the current approach. At the same time, regulators have sought to strictly control G-Token’s scope. It is expressly designated as an investment and savings product, not a payment token, thereby avoiding encroachment on the Bank of Thailand (BoT)’s monetary role. In line with this design, G-Token is not a cryptocurrency: it is a sovereign investment claim recorded on a permissioned DLT and cannot be used as legal tender or for general payments. Smart contracts prevent off-platform transfers, ensuring trading remains within authorized exchanges and blocking peer-to-peer movement. This “walled garden” architecture is atypical for digital assets but reflects the authorities’ intent to maintain oversight, avoid speculative arbitrage, and safeguard market integrity. Complementary SEC measures include anti-manipulation provisions, market surveillance requirements, price transparency standards, and the potential appointment of market makers to ensure orderly trading. Public communication further frames G-Token as a safe, government-backed savings product with short tenors—positioning it closer to a retail bond than a speculative cryptocurrency.

The initiative has also acted as a catalyst for broader legal modernization. In mid-2025, the Cabinet approved an Electronic Securities Bill to clarify how digital debt instruments fit within Thailand’s capital market laws. The bill is expected to formalize the SEC’s authority over digital securities, harmonize investor rights and secondary market rules with those for traditional instruments, and reduce reliance on temporary exemptions. Related amendments to the Securities Act and the Digital Asset Decree are underway to close remaining gaps, signalling a move toward a more coherent long-term framework. Yet, uncertainties persist, including the delineation of boundaries with the BoT, which is concurrently exploring a retail CBDC (“Digital Baht”). The BoT retains jurisdiction over payment tokens under the Currency Act and payment laws, while the SEC governs investment tokens. Although G-Token’s design respects this separation, widespread adoption as a deposit substitute could affect bank liquidity and monetary conditions, necessitating central bank oversight. Foreign investor participation also introduces additional legal complexity. If G-Tokens were purchased abroad, questions would arise as to which courts hold jurisdiction in cases of dispute and whether Thai law would prevail over foreign investor claims. Moreover, because the issuer is the Thai state, doctrines of sovereign immunity could limit the ability of foreign investors to sue the government in foreign jurisdictions, raising uncertainty over enforcement of rights and remedies (Waibel, 2011; Weidemaier & Gelpern, 2014). At the same time, the operational resilience of the blockchain platform remains an unresolved issue. Integrating G-Token into existing financial infrastructure, including banks’ on/off-ramp systems, will require continued regulatory refinement.

3.5. Risk Landscape and Analytical Framework for Policy Evaluation

While the motivations behind the G-Token initiative reflect broader global trends toward the digitalization and modernization of public finance, the implementation of such an instrument introduces multi-dimensional risks that remain insufficiently understood. Earlier discussions have shown that Thailand’s G-Token blends features of tokenized public debt, sovereign guarantees, and blockchain-based distribution within a still-evolving regulatory environment. This hybrid nature places the initiative at the intersection of fiscal innovation, market experimentation, and institutional realignment, meaning that its risk profile cannot be captured through a single disciplinary lens. A structured framework for identifying and evaluating these emerging risks is therefore essential to guide policy evaluation and regulatory adaptation. For the purposes of analysis, this study groups the risks into three interrelated categories—financial system risks, regulatory governance risks, and societal or behavioral risks—which together form the analytical lens for subsequent discussion.

The first category, financial system risks, stems from the potential disruption to established intermediation channels. As with other state-issued digital instruments, G-Token’s government backing and short maturity could encourage households to view it as a safe, liquid alternative to bank deposits. Although it is not designed for payments, this perception—particularly during periods of market volatility—may lead to a shift in savings away from banks, creating disintermediation pressures. If G-Token adoption were to scale rapidly or coincide with broader uptake of digital assets, the resulting contraction in bank deposits could tighten credit supply, increase funding costs, and introduce liquidity strains. Moreover, its quasi-cash characteristics raise the possibility of destabilizing effects on short-term funding markets and interest rate transmission, particularly if large volumes are redeemed simultaneously in response to market shocks or policy uncertainty.

The second category, regulatory governance risks, arises from the fragmented and provisional nature of the current oversight framework. Responsibility for G-Token is divided among the MoF, the SEC, and the BoT, making jurisdictional clarity critical but not yet fully achieved. The novelty of the instrument, coupled with its ad hoc legal treatment under the Public Debt Management Act and the Digital Asset Decree, raises concerns about long-term legal consistency, enforceability, and the allocation of risk accountability. The absence of a formal legal category for “government-issued digital investment tokens” means that key investor protection provisions, issuer obligations, and dispute resolution mechanisms rely on temporary exemptions from prospectus and licensing requirements. This lack of structural integration into existing financial laws leaves gaps that could complicate supervision, market conduct enforcement, and crisis management.

The third category, societal and behavioral risks, concerns the human interface with the instrument. At the micro-level, retail investors unfamiliar with digital assets may overestimate G-Token’s safety or liquidity, or fail to grasp its distinction from conventional savings products. The reliance on blockchain platforms and digital wallets introduces further barriers, particularly for individuals in rural areas or those with limited digital literacy, thereby risking exclusion of the very populations the initiative seeks to empower. Accessibility challenges are compounded by the government’s public communication strategy: how G-Token is framed, marketed, and explained will heavily influence adoption patterns, trust, and perceived legitimacy. Without clear, accessible education and transparent disclosure, there is a risk of fostering unrealistic expectations or enabling misinformed investment decisions.

These three risk categories are not discrete; rather, they are mutually reinforcing dimensions that shape G-Token’s overall risk profile. Weak regulatory coordination could exacerbate financial system shocks, while misleading public messaging could amplify speculative or irrational investor responses, triggering liquidity strains. Conversely, strengthening one dimension—such as by improving investor education—can also mitigate risks in others. In the following sections, each category will be examined in depth with reference to international benchmarks, comparative case studies, and relevant institutional principles. The objective is to assess whether Thailand’s G-Token initiative adequately anticipates and mitigates these risks, and to propose strategies for reinforcing its governance, operational resilience, and public trust.

3.6. Analysis of Findings

Thailand’s G-Token initiative can be critically assessed against international norms, comparative benchmarks, and normative legal principles to determine whether its design and implementation adequately address foreseeable vulnerabilities. Building on the evaluative framework established earlier, the analysis focuses on three interrelated dimensions of risk: financial system risks, regulatory governance risks, and societal and behavioral risks. The aim is to connect the conceptual foundations discussed previously with an applied evaluation, highlighting the robustness of Thailand’s regulatory responses within both domestic and global contexts.

3.6.1. Financial System Risks: Disintermediation and Monetary Spillovers

A primary concern with state-issued digital instruments is their potential to disintermediate the banking sector, particularly when they carry sovereign guarantees and offer short-term liquidity. Thailand’s G-Token, as a digital government debt instrument, functions as a risk-free, liquid asset that competes directly with bank deposits. By offering yields above typical deposit rates, it creates incentives for households to reallocate savings away from banks—a pattern documented in CBDC research where comparable substitutes compress bank margins and reduce credit creation (Brunnermeier & Niepelt, 2019; Barrdear & Kumhof, 2021).

While gradual disintermediation may emerge under normal conditions, the risk becomes more acute during financial stress. Survey data from the ECB’s CBDC pilot demonstrated that digital assets can accelerate bank runs due to their instant accessibility (European Central Bank [ECB], 2020). In the Thai context, a sudden shift into G-Tokens—perceived as safer and government-backed—could rapidly deplete bank deposits, forcing asset liquidations, tightening credit, and amplifying systemic stress. The speed and magnitude of such a shift would be shaped by three factors: the scale of issuance, the interest rate premium over deposits, and the ease of acquisition through digital platforms. These flows also weaken monetary policy transmission, as the migration of deposits into G-Tokens contracts the central bank’s primary liquidity channels, complicating control over interest rates and aggregate liquidity (Adalid et al., 2022). Without policy coordination, large-scale issuance could resemble quasi-monetization of public debt, where fiscal liabilities gain money-like properties and pressure aggregate demand, thereby raising the risk of inflationary spillovers and undermining price stability (Bank for International Settlements [BIS], 2021; International Monetary Fund [IMF], 2024).

External spillovers present an additional challenge if non-residents gain access. Similar to dynamics in stablecoins and cross-border CBDC models, large-scale foreign participation could channel volatile capital flows into and out of Thailand, amplifying exchange rate fluctuations and balance-of-payments pressures. Digital money circulating across borders heightens appreciation risks during inflow surges and accelerates depreciation during reversals (International Monetary Fund [IMF], 2020). The Bank for International Settlements (Bank for International Settlements [BIS], 2021) warns that cross-border CBDCs without coordinated safeguards can magnify volatility in small and open economies. Empirical evidence further shows that sovereign-backed digital assets can attract safe-haven demand in periods of global uncertainty, triggering abrupt capital flow reversals. For Thailand, sudden non-resident inflows could appreciate the baht and erode export competitiveness, while rapid outflows could destabilize the currency and strain foreign reserves.

Mitigation strategies, well established in CBDC and tokenized debt literature, include wallet caps, tiered remuneration, and holding penalties to curb large-scale deposit flight. Coordinated action between the MoF and BoT is essential to protect monetary aggregates, while caps on foreign holdings and reserve-based sterilization can help manage external volatility (Bank for International Settlements [BIS], 2021; International Monetary Fund [IMF], 2024). Ultimately, G-Token introduces three systemic risk transmission channels—deposit displacement, monetary policy interference, and cross-border volatility—that, if left unmanaged, could heighten liquidity stress, destabilize banking, and complicate macroeconomic management.

3.6.2. Regulatory Governance Risks: Legal Ambiguities and Institutional Coordination

The G-Token highlights significant gaps in Thailand’s regulatory governance, primarily the absence of a coherent legal category for state-issued digital financial instruments. While its issuance is enabled under the Public Debt Management Act B.E. 2548 (2005) and partially supervised under the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018), it currently operates through ad hoc exemptions rather than a dedicated legislative framework. This patchwork approach undermines legal certainty, regulatory coherence, and institutional accountability.

From a legal-theoretical perspective, the lack of stable “secondary rules” (Hart, 1961) leaves the G-Token in a regulatory limbo, reliant on interpretive discretion rather than clear statutory authority. Investor rights relating to issuance, custody, transfer, or redemption are therefore weakly defined. In Hartian terms, Thailand’s framework provides primary rules (permitting issuance) but fails to establish robust secondary rules clarifying who may adjudicate disputes, how obligations are recognized, and what remedies exist. This absence translates directly into practical uncertainty for investors. This ambiguity also challenges regulatory legitimacy (Black, 2008), which depends on transparency, accountability, and coherent justification. The MoF acts as issuer, yet prudential oversight is fragmented among the BoT, the SEC, and the Office of Public Debt Management—none with explicit authority to govern the full life cycle of a tokenized debt instrument.

This fragmentation has direct implications for investor protection. Disclosure requirements omit provisions standard in digital bond markets, such as detailed prospectus obligations, dispute resolution pathways, and clear liability rules for losses arising from smart contract errors or platform failures. For example, a trading platform might list G-Tokens without specifying whether investors could claim compensation in the event of coding flaws in the smart contract, whereas in conventional bond markets, underwriters are legally required to disclose such risks and assign liability. Such omissions create opportunities for regulatory arbitrage, particularly among intermediaries operating trading platforms. Weak institutional coordination—both vertically and horizontally—further amplifies governance risks for G-Token oversight. Vertically, fiscal policy under the MoF, monetary stability under the BoT, and digital infrastructure regulation under the SEC and the Electronic Transactions Development Agency (ETDA) operate in largely separate silos, with no unified framework to reconcile macroeconomic stability with investor protection. Horizontally, overlapping mandates and bureaucratic inertia mirror Thailand’s earlier experience with ICO regulation, where inconsistent licensing processes and reactive enforcement created market uncertainty (Kshetri, 2023; Jangjarat et al., 2023). This lack of coordination leaves critical aspects of issuance, custody, and secondary trading insufficiently regulated, undermining both coherence and confidence (International Organization of Securities Commissions, 2020).

International practice illustrates a more proactive path. Jurisdictions such as Germany, Singapore, and Hong Kong have reduced legal ambiguity by deploying regulatory sandboxes, issuing formal guidance, and enacting enabling legislation—examples include Germany’s Electronic Securities Act and amendments to Singapore’s Payment Services Act. These measures align institutional roles, enhance market confidence, and allow adaptive regulation without constraining innovation.

Thailand’s incremental approach offers short-term flexibility but leaves medium-term systemic vulnerabilities unresolved. In the absence of a defined legal category and coordinated oversight, responses to crises—whether token devaluation, platform failure, or large-scale investor losses—are likely to be slow, fragmented, and politically contentious. Such uncertainty not only raises operational and systemic risks but also poses reputational dangers for the state; without clear investor rights and remedies, public trust in government-backed digital instruments can erode rapidly. Strengthening regulatory governance, therefore, requires clear statutory definitions harmonized with public finance, securities, and consumer protection law, a formal cross-agency coordination mechanism to align oversight and crisis management, and transparent, consultative rulemaking processes to reinforce procedural legitimacy. Together, these measures would align Thailand’s approach with international governance models and create a more durable foundation for future sovereign digital instruments.

3.6.3. Societal and Behavioral Risks: Literacy, Trust, and Inclusion

In addition to macro-financial and regulatory concerns, the G-Token carries societal and behavioral risks that directly influence public engagement and the legitimacy of state-led digital finance initiatives. These risks are rooted in disparities in financial literacy, the influence of behavioral biases, and structural barriers to digital access, each of which shapes adoption patterns and long-term trust in the instrument.

Although the G-Token is positioned as a savings-oriented mechanism intended to broaden retail participation in government securities, it implicitly assumes a level of financial and technological readiness that remains uneven across Thai society. Surveys consistently show that digital financial literacy in Thailand lags behind OECD averages, with limited public familiarity in areas such as private key management, transaction validation, and the functioning of smart contracts (Moenjak et al., 2020; OECD, 2020a). These concepts present a substantially higher cognitive burden than conventional banking procedures. Insights from behavioral finance indicate that when confronted with unfamiliar financial products, individuals frequently rely on heuristics, leading to systematic misjudgments regarding liquidity, guarantees, and risk exposure (Shefrin, 2002; Lusardi & Mitchell, 2014). In the case of the G-Token, the association with sovereign backing may foster initial trust but also blur the distinction between a government debt instrument and an insured bank deposit, creating misconceptions about its risk–return profile and secondary market dynamics.

Investor behavior in digital markets further heightens vulnerability. Empirical evidence from cryptocurrency and tokenized asset markets demonstrates that retail participants often respond more to sentiment, peer activity, and social media cues than to underlying fundamentals, fostering speculative surges and abrupt withdrawals in periods of uncertainty (Shen et al., 2019; Vidal-Tomás & Ibañez, 2018; World Bank Group, 2023). Transposed to the G-Token context, similar herd dynamics could trigger mass redemptions during episodes of economic stress or policy ambiguity, amplifying volatility despite the product’s ostensibly conservative design.

Structural access inequalities add another layer of risk. Participation in tokenized sovereign debt markets requires a combination of technological tools and digital competencies: smartphone ownership, stable internet connectivity, secure key management, and familiarity with identity verification protocols. These requirements disproportionately disadvantage rural residents, older demographics, and lower-income households. National ICT statistics confirm that such digital divides persist, indicating that while the G-Token is presented as an inclusive instrument, it may inadvertently exclude those least equipped to participate (National Statistical Office of Thailand, 2025; OECD, 2020a). This paradox—where a public instrument designed to democratize investment access risks reinforcing existing socioeconomic disparities—undermines its stated policy objectives.

From a governance standpoint, these challenges point to a deficit in inclusive design. Principles of procedural justice and deliberative legitimacy stress that equitable participation in state-led financial innovation requires not only formal access but also the capability to make informed choices (Rawls, 1971; Black, 2008). Without comprehensive investor education, risk disclosures in plain language, and robust mechanisms for redress, participants remain exposed to losses from misinformation, phishing, and operational errors—risks that, if realized, could erode both market participation and institutional credibility.

International practice illustrates how these risks can be mitigated. Singapore’s adoption of tiered investor access models for tokenized products and the European Union’s requirement for financial literacy and awareness campaigns in digital finance demonstrate the value of embedding education and user protection into market infrastructure (Monetary Authority of Singapore, 2024; Zetzsche et al., 2021). Thailand’s current framework, however, lacks comparable institutionalized safeguards, creating a persistent gap between the rhetoric of democratized finance and the operational reality of uneven readiness. Addressing these societal and behavioral risks, therefore, demands sustained public investment in digital and financial literacy, user-centric design of access platforms, and inclusion-oriented eligibility frameworks. Without such measures, the G-Token may inadvertently deepen, rather than narrow, existing social and economic divides.

4. Discussion

Thailand’s G-Token represents a novel channel for public participation in government-backed assets, yet its implementation exposes vulnerabilities that span financial stability, legal governance, and societal trust. The preceding analysis identified critical risks—ranging from potential bank disintermediation and legal ambiguity to fragmented regulatory coordination and uneven public readiness—that together shape the initiative’s resilience and legitimacy. Addressing these challenges requires a coherent framework that combines legal certainty, robust risk mitigation, and transparent governance while safeguarding macro-financial stability. Situating Thailand’s approach within comparative international experiences offers insight into how these principles can be operationalized and where current practice may fall short.

4.1. Regulatory Legitimacy and Legal Fit

The long-term viability of the G-Token depends on its integration into Thailand’s legal architecture as more than a short-term policy innovation. Hart’s (1961) framework underscores that, alongside primary rules governing substantive obligations, a functioning legal order requires secondary rules that specify how legal norms are identified, applied, and enforced. At present, the G-Token operates in a legal grey zone—fiscally authorized under the Public Debt Management Act and supervised under the Emergency Decree on Digital Asset Businesses, yet without a codified classification as a tokenized security, a formal public debt instrument, or a distinct statutory category.

Such ambiguity dilutes enforceability and erodes public trust. In the absence of an explicit legislative mandate or a delegated regulatory instrument—such as an enabling decree or ministerial regulation—the G-Token lacks a clear “rule of recognition,” leaving unresolved the scope of investor rights, the extent of state obligations, and the allocation of liability in cases of dispute, operational failure, or smart contract malfunction. Viewed through Black’s (2008) framework, this undermines regulatory legitimacy: exemptions are being justified pragmatically but without transparent procedures, coherent justification, or clear accountability structures. Comparative practice shows the benefits of doctrinal clarity: the EU’s DLT Pilot Regime embeds tokenized assets within the established securities framework to preserve investor protection, while U.S. regulators, led by the SEC, consistently assert that investment-type digital instruments remain subject to securities law irrespective of technological form.

For Thailand, securing regulatory legitimacy means moving beyond ad hoc exemptions and policy guidance toward explicit, rule-based incorporation of the G-Token into the statutory framework. Such codification would reinforce public confidence, ensure predictable enforcement, and align the country’s approach with emerging global norms for tokenized public finance. At present, the G-Token is neither fully recognized as a “digital asset” under the Emergency Decree on Digital Asset Businesses nor as a traditional government security. This hybrid status explains why earlier sections highlight risks commonly associated with digital assets—such as smart contract errors or disclosure gaps—even though the G-Token does not formally fall within that category. In practice, regulators face a dual challenge: providing sufficient investor safeguards comparable to digital asset regimes, while at the same time clarifying the instrument’s distinct status as a sovereign debt innovation.

4.2. Risk-Based Oversight and Containment

Beyond securing legal clarity, the governance of the G-Token demands a risk-based regulatory framework that calibrates oversight to the probability and potential impact of adverse outcomes. This approach enables regulatory interventions to remain proportionate, targeted, and responsive in policy environments characterized by complexity and rapid innovation.

The primary vulnerabilities of the G-Token span financial, technological, and behavioral dimensions. Its combination of above-market yields, sovereign backing, and frictionless digital access increases the likelihood of deposit migration from banks—especially under conditions of financial stress—threatening funding stability and altering household savings patterns. Unchecked, these dynamics could magnify liquidity volatility and impair monetary policy transmission. Operational resilience is another critical concern: disruptions to blockchain infrastructure, whether through cyberattacks or technical malfunctions, could halt transactions or compromise asset integrity. At the behavioral level, inadequate disclosure or investor misunderstanding may lead to inappropriate risk-taking, particularly among retail participants with limited digital finance literacy.

Mitigating these risks requires a layered set of safeguards. Macroprudential tools such as issuance ceilings, wallet caps, or tiered remuneration can curb excessive inflows and reduce disintermediation pressures. Another possible safeguard, frequently discussed in CBDC design, is imposing individual holding limits. Such caps prevent households or firms from reallocating excessively large balances into state-backed tokens during times of stress, thereby reducing the risk of bank runs and protecting banking-sector liquidity. Thailand’s current G-Token framework has not introduced such limits, leaving a potential policy gap that may require future consideration. Robust technical and cybersecurity standards—aligned with international benchmarks—should be embedded in the platform’s operational requirements. Equally, plain-language, standardized disclosures must be mandated to counteract information asymmetries and behavioral biases.

Comparative experience reinforces the viability of such measures. The Monetary Authority of Singapore (MAS) confines tokenization initiatives to controlled sandboxes, subjecting participants to capital adequacy, AML/CFT compliance, and strict cybersecurity protocols. Similarly, the ECB’s DLT Pilot Regime allows digital instruments to operate only within a regulated perimeter that replicates the safeguards of traditional financial markets. These examples demonstrate that financial innovation can advance without diluting supervisory standards when risks are systematically identified, prioritized, and contained.

From a theoretical standpoint, perspectives from organizational ecology and agency theory reinforce these governance needs. Oversight bodies must adapt dynamically to technological and institutional change, while the threat of legal sanction shapes compliance behavior by aligning intermediary incentives with regulatory expectations. Embedding these principles into Thailand’s oversight design would enhance resilience and accountability, even as the regulatory framework continues to evolve.

4.3. Public Trust and Transparency

Sustained public trust is essential for the viability of the G-Token. Even when a digital instrument is legally sound and technologically robust, adoption can remain limited—or panic withdrawals may occur—if users question its stability or the certainty of redemption. Trust in this context extends beyond the assurance of sovereign backing; it is grounded in transparency, clarity, and consistent operational performance.

For retail investors, a precise understanding of whether the G-Token functions as a bond, a savings product, or a near-money asset is fundamental. This includes clear articulation of the rights and obligations associated with holding it. Evidence from behavioral economics indicates that in novel financial contexts, individuals tend to rely on heuristics, often leading to systematic misinterpretations of liquidity, risk, and return profiles (Kahneman, 2012; Lusardi & Mitchell, 2014). Without targeted intervention, such misunderstandings could distort usage patterns and undermine confidence. Addressing this requires plain-language disclosures, broad-based investor education programs, and accessible grievance and redress mechanisms. Transparent reporting on the allocation of proceeds and the generation of returns further reinforces institutional credibility.

Operational resilience is equally central to trust. Given its reliance on blockchain infrastructure and the role of private exchanges in secondary trading, any technical breach, prolonged downtime, or manipulation could erode the credibility of the G-Token and, by extension, public confidence in fiscal management. The Bank for International Settlements (Bank for International Settlements [BIS], 2021) stresses that money-like instruments must remain “information-insensitive,” meaning that holders should not be compelled to continually reassess the instrument’s safety under normal conditions. Achieving this requires robust cybersecurity, transparent governance structures, and unequivocal redemption commitments supported by clear risk mitigation protocols.

4.4. Systemic Impact and Monetary Policy Coherence

Evaluating the systemic implications of the G-Token requires an integrated assessment of its interaction with monetary policy operations, financial stability dynamics, and the structure of the banking sector. While the instrument expands the government’s financing toolkit and diversifies household savings channels, its large-scale adoption could alter the functioning of Thailand’s monetary and credit systems in ways that warrant close scrutiny.

The most immediate concern lies in potential bank disintermediation. If households reallocate significant portions of their deposits into G-Token—particularly in the presence of a yield premium over commercial bank rates—banks may face liquidity shortages, elevated funding costs, and constraints on credit provision. These pressures could weaken the conventional monetary transmission mechanism, where commercial banks play a central role in channelling policy-driven liquidity into the real economy. The fact that the G-Token is issued by the Treasury rather than the central bank further complicates the institutional balance, blurring the distinction between fiscal borrowing instruments and monetary liabilities. In such circumstances, fiscal issuance could unintentionally encroach upon monetary functions, introducing coordination challenges between the MoF and the BoT.

These considerations parallel international debates on the macro-financial consequences of CBDCs. Research from the BIS and other policy bodies cautions that sovereign digital instruments—if not carefully designed—can undermine the “singleness of money” by fragmenting liquidity pools and altering the hierarchy of money-like assets. Recommended safeguards include holding caps, tiered interest structures to disincentivize excessive migration from deposits, and technical integration with central bank settlement systems to preserve monetary coherence (Bank for International Settlements [BIS], 2021; International Monetary Fund [IMF], 2024). Notably, the MAS has implemented tokenization pilots in parallel with wholesale CBDC settlement infrastructure, maintaining the integrity of monetary transmission while facilitating innovation.

Sustainability adds another layer of concern. While the risk of sovereign default is minimal given Thailand’s debt management framework, long-term viability depends on fiscal prudence, credible redemption commitments, and transparent reporting of how proceeds are used. Operational sustainability requires strong protection against fraud, coding flaws, and cyberattacks, which have repeatedly undermined confidence in digital asset markets (International Organization of Securities Commissions, 2020; Financial Stability Board [FSB], 2023). Fraud risks are amplified by reliance on digital wallets and exchanges, where phishing and identity theft remain prevalent. The durability of the G-Token also hinges on avoiding crowding-out effects: if issuance expands without coordination, it could weaken demand for conventional bonds or strain banking liquidity, reducing the instrument’s fiscal utility. In this sense, sustainability is not only about creditworthiness but also about governance capacity, institutional safeguards, and technological resilience.

A forward-looking framework for the G-Token must therefore evaluate whether the instrument supports or impedes policy rate transmission, whether it could exacerbate capital flow volatility in stress scenarios, and whether it maintains a clear institutional separation between fiscal debt issuance and central bank liabilities. Addressing these questions is critical to ensuring that the G-Token complements—rather than destabilizes—macroeconomic management.

With these four pillars—legal legitimacy, risk-based oversight, public trust, and systemic coherence—Thailand can establish a governance framework capable of balancing innovation with stability. The next part applies this framework to compare Thailand’s approach with international benchmarks from the ECB, MAS, and the U.S. SEC, identifying both strengths and areas requiring refinement.

4.5. Comparison of Thailand’s G-Token and International Regulatory Benchmarks

To operationalize the four conceptual pillars outlined earlier, six interrelated dimensions provide a practical lens for evaluating state-issued digital instruments: legal classification, investor protection, monetary policy integration, secondary market infrastructure, systemic risk safeguards, and oversight regime maturity. These dimensions are grounded in regulatory theory and international practice, reflecting notion of legal recognition (Hart, 1961), principles of risk-based oversight (Black, 2008), and the FSB’s guideline of “same activity, same risk, same regulation.”

Table 1. Comparison of Thailand’s G-Token vs. ECB, MAS, and U.S. SEC Benchmarks.

Dimension	Thailand (G-Token)	EU/ECB	Singapore (MAS)	U.S. (SEC)
Legal Classification	Investment token under Public Debt Act & Digital Asset Decree	Regulated as bond/security under existing capital markets law	Debenture under SFA, treated as traditional security	Sovereign bond, exempt from registration, token assessed under Howey test
Investor Protection	Government guarantee, KYC, disclosure, exchange restrictions	MiFID II disclosures, investor rights, suitability rules	Retail warnings, asset segregation, token governance rules	SEC enforcement, antifraud rules, disclosure requirements
Monetary Policy Integration	No payment use; separated from monetary policy tools	Unified ledger vision, wholesale CBDC for DLT settlement	Digital SGD pilots for token settlement, policy control	Stablecoin regulation debate, Fed reserves control aim
Secondary Market Infrastructure	Licensed crypto exchanges, license waivers, indicative pricing	DLT Pilot Regime, EIB tokenization projects, sandbox approach	Marketnode, GL1, interoperability focus	Security token platforms exist, incremental policy steps
Systemic Risk Safeguards	Thin liquidity warning, indicative price, cybersecurity rules	MiCA, ECB oversight expansion, systemic safeguards	Sandbox controls, tech standards, financial stability goal	FSOC oversight, systemic risk tools, interagency monitoring
Oversight Regime Maturity	SEC cooperation with BoT & MOF, new rules, public hearing	Integrated EU framework, ESMA, ECB expanding oversight perimeter	Unified supervisor model, agile policy updates, industry links	Fragmented but strong enforcement capacity

Note: ECB = European Central Bank; MAS = Monetary Authority of Singapore; SEC = Securities and Exchange Commission; SFA = Securities and Futures Act; KYC = Know Your Customer; MiFID II = Markets in Financial Instruments Directive II; CBDC = Central Bank Digital Currency; SGD = Singapore Dollar; DLT = Distributed Ledger Technology; EIB = European Investment Bank; MiCA = Markets in Crypto-Assets Regulation; FSOC = Financial Stability Oversight Council; ESMA = European Securities and Markets Authority; BoT = Bank of Thailand; MoF = Ministry of Finance; GL1 = Global Layer One (distributed ledger infrastructure project under MAS).

compares Thailand’s G-Token against benchmarks from the ECB, the MAS, and the U.S. Securities and Exchange Commission (SEC), highlighting both alignment and divergence.

Thailand’s legal treatment of G-Token—creating a bespoke category under the Public Debt Management Act and the Emergency Decree on Digital Asset Business—demonstrates regulatory creativity but diverges from the dominant global approach of embedding tokenized sovereign debt within existing securities law. Integration, as seen in the EU and Singapore, offers continuity of investor rights, consistent legal enforceability, and reduced interpretative uncertainty. Even in the U.S., where sovereign bonds are exempt from registration, tokenized instruments remain subject to antifraud provisions and disclosure requirements under the Howey test framework. Thailand’s stand-alone classification, while flexible, risks leaving investors and courts uncertain about rights, obligations, and remedies, particularly in cases of disputes, technical malfunctions, or cross-border claims. Without alignment to a well-established securities framework, there is a greater likelihood of legal fragmentation, which could impair both market confidence and dispute resolution efficiency.

Investor protection mechanisms in Thailand—government guarantee, KYC rules, exchange restrictions, and disclosure requirements—signal a cautious policy stance, but remain narrower in scope than leading jurisdictions. The EU’s MiFID II regime not only enforces suitability tests and disclosure standards but also guarantees enforceable investor rights in line with established market practices. MAS in Singapore goes further by mandating asset segregation, governance standards for token issuers, and clear retail risk warnings. The SEC in the U.S. applies antifraud protections and disclosure obligations irrespective of technological form. By contrast, Thailand’s reliance on administrative measures and limited trading channels may leave gaps in protection, especially in secondary market volatility scenarios. Embedding these safeguards in a comprehensive legislative framework would ensure greater resilience, enforceability, and investor confidence.

On monetary policy integration, Thailand’s approach is comparatively strong. By prohibiting payment functionality for G-Token, it preserves the Bank of Thailand’s ability to control liquidity flows and maintain the “singleness of money” within the domestic financial system. This mirrors the ECB’s strategy of keeping tokenized sovereign instruments separate from wholesale CBDC settlement layers, as well as MAS’s careful distinction between digital bond pilots and currency issuance. Such separation helps prevent monetary policy transmission disruptions and reduces the risk of liquidity substitution away from bank deposits toward near-money sovereign tokens. However, as the G-Token scales, maintaining this separation will require continual coordination between fiscal and monetary authorities to prevent unintended overlaps in policy objectives.

Thailand’s reliance on licensed cryptocurrency exchanges for secondary market operations offers a pragmatic rollout pathway, but falls short of the resilience and interoperability seen in specialized infrastructures such as the EU’s DLT Pilot Regime or Singapore’s Marketnode. While licensed exchanges provide familiarity for retail investors, they also carry risks tied to platform security, liquidity fragmentation, and operational downtime. By contrast, purpose-built infrastructures in the EU and Singapore integrate settlement systems with high levels of redundancy, interoperability, and regulatory supervision. For Thailand, moving from pilot phase to scaled issuance will likely require either adapting existing exchanges to meet these higher standards or developing dedicated settlement frameworks aligned with sovereign asset trading norms.

Systemic risk safeguards in Thailand currently rely on administrative measures—liquidity warnings, indicative pricing, and basic cybersecurity protocols—rather than structural protections. Leading jurisdictions employ deeper systemic resilience tools: the EU incorporates stress testing, cross-platform supervision, and integrated settlement layers, while Singapore uses sandbox controls, technical standards, and continuous financial stability monitoring. The U.S., through the FSOC, engages in interagency coordination to identify and contain risks across financial markets. For Thailand, as issuance volume and retail participation grow, early-stage guardrails will need to evolve into comprehensive contingency planning, integrating real-time market monitoring, circuit breakers, and coordinated cross-regulatory oversight.

Finally, the oversight regime maturity in Thailand shows promising progress through active cooperation between the SEC, BoT, and MoF, alongside public hearings on regulatory design. Yet, when compared to MAS’s unified supervisor model or the EU’s harmonized MiCA-ESMA-ECB framework, Thailand’s oversight landscape remains fragmented, with limited technical capacity to address complex cross-domain risks. Building a mature oversight regime will require institutional consolidation, sustained investment in supervisory technology, and the creation of agile, cross-functional regulatory teams capable of adapting to evolving market conditions.

It can be said that Thailand’s G-Token aligns with international best practice in maintaining monetary policy separation and adopting a cautious, phased rollout. However, it diverges in legal integration, the breadth of investor protection, market infrastructure sophistication, and systemic safeguard depth. Closing these gaps will require embedding G-Token within a mature securities law framework, institutionalizing investor protection measures, upgrading market infrastructure resilience, and enhancing interagency oversight capacity—steps that would allow Thailand to preserve its innovative edge while meeting global standards for stability, transparency, and trust.

5. Conclusions

Thailand’s G-Token initiative underscores both the promise and the complexity of sovereign digital instruments. By combining fiscal innovation with blockchain infrastructure, the program seeks to democratize access to government debt markets while navigating uncharted legal, regulatory, and monetary policy terrain. The analysis in this study has identified critical vulnerabilities—including legal ambiguities, risks of financial disintermediation, governance and oversight gaps, and significant societal challenges—and situated these against the experience of leading jurisdictions. For G-Token to strengthen rather than destabilize Thailand’s financial landscape, its evolution must be guided by deliberate legal, regulatory, and institutional reforms that are coordinated across agencies and anchored in both domestic realities and international best practices.

For the MoF, the most immediate priority is to remove interpretive uncertainty by embedding explicit provisions for digital debt instruments within the Public Debt Management Act or equivalent statutes. Doing so would provide a definitive legal basis for issuance, enhance enforceability, and signal long-term policy commitment. Equally important is advancing transparency standards. Even in the absence of binding obligations, aligning with global best practice by disclosing comprehensive risk factors, contractual terms, and investor rights would help foster market confidence and set a precedent for future tokenized issuances. Over the medium term, the Ministry should embed G-Token issuance into the broader debt management strategy in a way that complements, rather than displaces, traditional bond markets and bank funding channels. Strategic expansion into other tokenized formats—such as green or infrastructure bonds—could be considered, provided issuance caps, maturity profiles, and investor base diversification are prudently managed. Sustained investment in nationwide financial literacy initiatives will be essential to ensure participation is broad-based and equitable, preventing concentration among digitally proficient urban investors while narrowing digital access gaps.

The SEC’s role will be to institutionalize enforceable investor protections within a dedicated framework tailored to digital sovereign instruments. This framework should clearly define issuance procedures, secondary market conduct standards, and intermediary obligations, ensuring that both primary and secondary markets operate under robust supervision. Effective surveillance mechanisms—supported by indicative pricing models and standardized disclosure templates—can help mitigate risks of speculative activity, price manipulation, and investor misinformation. Over time, the SEC may find it necessary to establish specialized supervisory units for digital instruments and to develop user-centric standards for trading platform functionality, accessibility, and security. Targeted investor education campaigns, grounded in behavioral research, should focus on clarifying the distinctions between G-Token, conventional savings products, and private cryptocurrencies, thereby reducing misperceptions and reinforcing disciplined investment behavior.

The BoT must maintain a system-wide perspective, closely monitoring the interaction between G-Token adoption, bank deposit flows, and monetary policy transmission. Preserving a strict functional separation between G-Token and payment instruments will help safeguard the integrity of currency management and liquidity control. Active surveillance of liquidity patterns and capital movements will be critical for detecting early signs of disintermediation or funding stress within the banking sector. Should adoption reach a scale that materially affects the monetary ecosystem, the central bank may need to adjust its liquidity management toolkit or work with commercial banks on adaptive balance sheet strategies. Longer-term planning should also address potential interoperability between G-Token and emerging digital infrastructures—such as retail or wholesale CBDCs—while ensuring that fiscal innovation does not erode the institutional boundary between monetary liabilities and sovereign debt obligations.

Thailand’s experience holds valuable lessons for other jurisdictions considering similar innovations. Chief among these is the importance of interagency coordination that reconciles fiscal objectives with monetary stability and investor protection. Comparative evidence demonstrates that legal clarity, structural safeguards, and inclusive platform design must be embedded from inception to build and sustain trust while mitigating systemic risk. While international benchmarks offer useful guidance, the regulatory and technological design of tokenized debt must be adapted to each jurisdiction’s institutional capacity, market structure, and digital readiness. In this respect, Thailand’s cautious, phased approach—if coupled with deepening governance maturity—has the potential to serve as a pragmatic model for emerging markets seeking to modernize public finance without undermining financial stability.

Further research will be necessary as G-Token transitions from pilot implementation to a sustained financing channel. Empirical studies could examine its macro-financial impacts on household savings behavior, bank deposit stability, and sovereign borrowing costs. Behavioral research could explore investor comprehension of risk and product features, informing refinements in disclosure and education strategies. Legal scholarship could evaluate whether existing statutes and delegated regulations are sufficient to address disputes, technological failures, or systemic events. Technological research should assess the security, interoperability, and scalability of blockchain platforms underpinning issuance and settlement. Comparative policy analysis could identify which regulatory configurations most effectively balance innovation with systemic safeguards. Longitudinal studies tracking participation patterns and distributional effects would clarify whether the program is achieving its stated goals of financial inclusion and expanded retail participation.

To further align this study with comparative regulatory debates, the four analytical pillars developed here—legal legitimacy, risk-based oversight, public trust, and systemic coherence—can be mapped onto three overarching governance dimensions commonly emphasized in international literature. Regulatory legitimacy corresponds to clear lines of accountability, ensuring transparent allocation of authority and responsibility. Risk-based oversight and systemic coherence together address resilient liquidity calibration, focusing on how issuance volumes, holding caps, and supervisory mechanisms mitigate destabilizing flows. Public trust and systemic safeguards reinforce cyber-resilience, given that blockchain integrity, operational security, and transparent governance are preconditions for sustained confidence. This mapping demonstrates that while the discussion was structured through four themes, they remain consistent with the accountability, liquidity, and resilience triad guiding international regulatory assessments of sovereign digital instruments.

Through an iterative process of evidence-based policy adjustment, Thailand can position G-Token as a credible and responsible template for sovereign digital instruments—strengthening fiscal capacity, broadening capital market access, and expanding citizen participation in public finance, all while preserving monetary stability and systemic integrity.