Thailand’s second-largest bank is developing a digital-asset ecosystem to provide a funding route for companies, a stance that contrasts with skepticism toward crypto among some mainstream lenders globally. Kasikornbank Pcl 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 bank also has divisions focused on blockchain technology and custodial services for virtual tokens.
“We’re advising some clients to issue tokens for fund raising,” Kasikornbank’s Co-President Pipit Aneaknithi said in an interview on Monday. “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 firms are reengaging with opportunities in digital assets as the sector rebounds from a 2022 market rout and a series of bankruptcies. Prime Minister Srettha Thavisin’s government is also open to blockchain technology and has touted a plan to use digital ledgers to facilitate a $14 billion cash handout.
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, 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 billionaire Sarath Ratanavadi’s plan to partner his Gulf Energy Development Pcl with Binance, the world’s largest digital-asset exchange, to start a local crypto trading venue.
Crypto Risks
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, 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, whose Securities and Exchange Commission has cracked down on an industry it describes as ripe with fraud and non-compliance. Around the world, financial institutions such as JPMorgan Chase & Co, HSBC Holdings Plc 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.
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