XSpring Capital has teamed up with Krungthai Card (KTC) to launch a product that converts digital assets into cash.
The KTC-XSPRING cash card, which will be officially launched later this month, aims to issue loans of 5-7 billion baht within three years and lure 5-10% of the investors trading in Thailand's digital assets market.
The alliance between XSpring, a holding corporation that connects conventional and digital finance, and the leading consumer finance operator KTC, revealed on Wednesday that the loans can be collateralised by using a variety of well-recognised assets to provide liquidity to digital asset holders.
KTC views this collaboration as a new facet of the loan industry, aiming to tap into the new customer base of digital asset-related markets. With KTC-XSPRING, KTC aims to increase the number of lending-programme members to drive the growth of personal loan portfolios and gain a greater market share in the industry.
An economic downturn, which affects people's income and causes liquidity issues, is undeniably favourable to the growth of microfinance, particularly personal loans, said Varangkana Artkarasatapon, president of XSpring.
The company foresees expansion opportunities in the credit industry, where exponential growth is highly anticipated in the second half of this year, she added.
Meanwhile, the decline in digital asset prices has made this year particularly difficult for digital asset-related businesses. There are currently more than 3 million registered digital asset trading accounts in Thailand, and many of these traders could be impacted by the current digital asset market downturn, which results in low liquidity and a lack of cash flow.
The introduction of the digital asset-collateralised loan programme that converts digital assets into ready-to-use cash marks the first step of its entry into the cash lending market by incorporating a new alternative collateralised asset type, which is digital assets.
"We are certain that this synergy will enable us to successfully enter the loan industry as a team. In addition to an expectation of winning 5-10% of Thailand's digital asset market daily trading volume of over 2.66 billion baht through our crypto-collateralised loan customers, XSpring plans to lend over 5-7 billion baht within three years," said Ms Varangkana.
Clients who wish to convert their digital assets using the KTC–XSPRING cash card will need to have a trading account with the XSpring Digital trading platform in order to bring in digital assets that they acquire as loan collateral.
In the future, the service will also accept a variety of well-recognised cryptocurrencies as collateral, and introduce more loan categories, Ms Varangkana added.
Phichamon Jitpentham, assistant chief executive of KTC's personal loan business, said that with a contemporary vertical card design, all the functionality associated with swipe-transfer-cash withdrawals, and the strength of MasterCard's network of over 80 million merchants worldwide, members are able to use the KTC-XSPRING cash card more conveniently to satisfy consumer behaviour in a digital era that value quick, secure, contactless services.
Cardholders can make online purchases at any retailer, anywhere, and at any time. They can also use the KTC Mobile application for real-time money transfers to bank accounts at 15 different banks and make unlimited, fee-free withdrawals from ATMs.