From what we can tell, Kasikornbank has committed itself to developing a digital asset ecosystem, that among other things, will be pitched as a fundraising platform for companies. In a December interview with Bloomberg, Kasikornbank’s co-president Pipit Aneaknithi said that the bank is advising some clients to issue tokens for fundraising, a market in which the Thai lender sees potential, adding that “developing a digital-asset ecosystem that will be very cost efficient compared with existing, traditional platforms.”
It seems that Kasikornbank wants to revamp and legitimize an element of the digital asset ecosystem for which there is questionable demand today. Coin offerings were all the rage in 2017, but we know how this story goes. By ZeroCap’s estimate, 95% of projects failed, and investors lost roughly 90% of the value of their ICO investments.
Now, to be sure, if a large incumbent bank is the one overseeing a coin offering, and the process is regulated, many of the problems seen in the 2017-18 ICO boom and bust would be unlikely to surface. And to that end, Thailand has implemented policies for coin offerings as part of a wider digital-asset rulebook. In December, a unit of Bangkok-based Grammy Entertainment along with Broadcast Thai Television sought to raise 265 million baht (US$7.6 million) from an offering of tokens to help fund investments in a movie.
There remain some sticking points about coin offerings in Thailand, such as how to settle transactions. One possibility would see Kasikornbank’s blockchain division settling client transactions, while its custody business could hold tokens for the buyer and seller. It is also unclear which companies would be authorized to offer tokens.
Separately, in September Kasikornbank launched KXVC, a US$100 million venture capital fund targeting Web3, DeFi and AI, which also builds solutions of its own. For instance, it has created Ainu, a digital identity verification solution. One of Ainu’s aims is to help blockchain and crypto firms comply with regulatory requirements. KXVC has a global focus and initially plans to invest in about 30 startups and funds in the U.S., EU, Israel and Asia Pacific.
KXVC was spun out of the Thai lender’s innovation arm KX, whose recent investments include participation in the US$5 million seed round of blockchain startup Forward.
Overall, we think it is too early to say whether Kasikornbank’s crypto gambit will bear fruit. In a certain sense, it is out of the Thai bank’s hands. Major economies like the U.S., China and India have yet to embrace digital assets, and what they ultimately decide will have a huge impact on crypto’s future trajectory. For now, we like the prospects of Kasikornbank’s other fintech businesses better.