The Popular Kasikorn Bank Spearheads Tokenised Funding in Thailand
In the ever-evolving landscape of global finance, Kasikorn Bank (K-Bank), Thailand’s second-largest bank, is making waves by pioneering tokenised securities and digital assets. This innovative approach to fundraising is set to revolutionise how businesses access capital, offering a more cost-efficient alternative to traditional loans and equity sales.
Thai Bank Embraces Tokenized Securities
Kasikorn Bank is taking the lead in introducing tokenised securities to its clients, aligning itself with Thailand’s emerging crypto rulebook. The bank’s co-president, Pipit Aneaknithi, is enthusiastic about the potential benefits of token sales, stating that they could be a more economical option than conventional financing methods.
This bold move follows Kasikorn Bank’sacquisition of Satang Corp (Now Orbix), a digital asset exchange, for a substantial $103 million investment. The timing appears opportune, with Prime Minister Srettha Thavisin advocating for blockchain technology to facilitate a $14 billion distribution while introducing a favourable regulatory framework for coin offerings.
Tokenisation Gaining Momentum in Thailand
The bank’s proactive stance on tokenised securities is already bearing fruit. Notable success stories include Grammy Entertainment and Broadcast Thai Television, which raised an impressive $7.6 million through a token offering to fund a movie project. Furthermore, billionaire Sarath Ratanavadi plans to enter the cryptocurrency market by partnering with his Gulf Energy Development firm and Binance.
However, Kasikorn Bank is mindful of proceeding cautiously despite the promising climate for expansion. This contrasts with the more sceptical view of the US Securities and Exchange Commission regarding the legality of coin offerings.
The Challenge of Coin Offerings
One of the critical challenges in implementing coin offerings lies in how transactions are settled. Kasikorn Bank’s blockchain division is poised to handle transaction settlements, while its custody business will securely hold tokens for both buyers and sellers. Stringent anti-money laundering and know-your-customer checks are likely prerequisites for companies seeking to participate in token offerings, potentially limiting access for decentralised finance entities.
Kasikorn Bank on the Global Stage
Thailand is not alone in its pursuit of digital asset flows, joining Asian counterparts such as Hong Kong, Japan, Singapore, and the European Union. Singapore’s Sygnum Bank has recently launched a crypto brokerage and custody business, while Hong Kong is actively expanding its tokenisation infrastructure.
Embracing Digital Assets Beyond Token Sales
Kasikorn Bank’s ambitions extend beyond tokenised securities, with the bank heavily investing in the web3 space. Alongside Citi, its venture capital arm has contributed to funding BondbloX, a fractional bond platform based in Singapore. Additionally, the bank launched a $100 million venture capital fund called KXVC, targeting web3, DeFi, and AI ventures. Notably, KXVC has created Ainu, a digital identity verification solution to assist blockchain and crypto firms comply with regulatory requirements.
Kasikorn Bank’s Forward-Thinking Approach
Kasikorn Bank’s embrace of digital currency is evident in its early support for the digital yuan, underlining its commitment to staying ahead of the curve in the evolving financial landscape.
Blockchain’s Prominence in Thailand
The adoption of blockchain technology is gaining momentum in Thailand, with the government implementing initiatives like the blockchain digital wallet giveaway to boost the economy. Though initially broad in scope, the program is now targeted towards individuals with specific income and deposit criteria. This initiative is set to commence in April 2024 and aims to encourage spending at physical stores, benefiting Thai retailers.
As Kasikorn Bank takes pioneering steps towards the future of finance, it exemplifies the potential for traditional banks to embrace innovation and transform the financial landscape for the better. With tokenised securities gaining traction, Thailand stands at the forefront of a global shift towards more accessible and efficient fundraising methods.
