Kasikornbank says it is developing a digital-asset ecosystem to provide a funding route for companies, an approach that contrasts with the scepticism some mainstream lenders have towards cryptocurrency.
The bank bought the licensed digital-asset exchange Satang Corp in October as part of the strategy, an unusual instance of an established lender acquiring a crypto trading platform. The Satang Pro platform has been renamed Orbix.
KBank also has divisions focused on blockchain technology and custodial services for virtual tokens.
“We’re advising some clients to issue tokens for fundraising,” co-president Pipit Aneaknithi said in an interview this week. “We see potential in this market. We’re serious about developing a digital-asset ecosystem that will be very cost-efficient compared with existing, traditional platforms.”
Thai companies are re-engaging with opportunities in digital assets as the sector rebounds from a 2022 market rout and a series of bankruptcies. The government of Prime Minister Srettha Thavisin is also open to blockchain technology and has touted a plan to use digital ledgers to facilitate its planned 500-billion-baht digital cash handout.
Mr Pipit did not specify which companies are being advised to issue tokens but added they can be more cost-effective than using loans or share sales. He envisages companies offering tradeable tokens that would pay a yield.
The Securities and Exchange Commission has put in place policies for coin offerings as part of a wider digital-asset rulebook. Issuers have already tapped the framework.
For instance, last year a unit of SET-listed GMM Grammy Entertainment Plc along with Broadcast Thai Television sought to raise as much as 265 million baht from an offering of tokens to help fund investments in a movie.
Coin offerings boomed globally back in 2017 but the value of many tokens subsequently crashed, a debacle that continues to cloud the segment. There were about 116,000 active crypto trading accounts in Thailand in November of this year, compared with a peak of roughly 700,000 during the pandemic-era digital-asset bubble in 2021, according to official data.
Other Thai crypto projects include the planned partnership between Gulf Energy Development Plc and Binance, the world’s largest digital-asset exchange, to start a local crypto trading venue.
Binance last month pleaded guilty to US anti-money laundering and sanctions contraventions and was hit with a $4.3 billion penalty, emblematic of risks that have tarnished crypto’s reputation and left many in traditional finance wary.
Kasikornbank will tread carefully in line with regulations, Mr Pipit said, adding that “with the proper supervision being put in place in many countries, the time is ripe for healthy expansion”.
A range of jurisdictions, such as Hong Kong, Singapore, Dubai and the European Union, are seeking to foster digital-asset hubs. The picture is cloudier in the US, where the SEC has cracked down on an industry it describes as ripe with fraud and non-compliance.
Around the world, financial institutions such as JPMorgan Chase, HSBC and Franklin Templeton are cautiously flipping the switch on new systems built around blockchains. But it remains to be seen how quickly these applications can achieve scale.