Thailand’s second-largest bank, Kasikornbank has acquired local crypto exchange Satang. This move, supported by Unita Capital and Orbix subsidiaries, marks a significant entry of Kasikornbank into the cryptocurrency sector. The acquisition is expected to impact the digital assets sector and aligns with the trend of banks venturing into crypto.

Key takeaways from the article 

• Kasikornbank has made a significant move into the digital assets sector by acquiring the local crypto exchange, Satang.
• This acquisition is expected to have a considerable impact on users, the crypto exchange, and crypto services.
• The move could potentially pave the way for other traditional financial institutions to venture into the crypto space.

Overview

Kasikornbank, also known as KBank, is indeed one of the largest commercial banks in Thailand. Since its establishment in 1945, it has grown significantly and has become a key player in the Thai financial market. As of June 2023, it held the #2 spot in the Thai banking sector with a market share of 15.97% for loans and 17.12% for deposits. KBank’s innovative approach has led to the introduction of new digital banking products and services to the Thai market, further solidifying its position.

On a global scale, there’s an undeniable surge in interest in digital and cryptographic assets. The trading volume of crypto assets has seen a rapid increase, particularly since the onset of the COVID-19 pandemic. This growth is largely driven by both retail and institutional investors adopting digital assets. A significant number of institutional investors are allocating a portion of their portfolios to digital assets. This trend is mirrored in the growing public awareness, acceptance, and usage of cryptocurrencies. The potential for cryptocurrencies to disrupt the traditional financial system is significant and is attracting considerable regulatory attention.

Kasikornbank’s Move into Crypto

Kasikornbank has made a significant move into the digital asset space by acquiring a majority stake in Satang Corporation, a local CEX. The bank now owns 97% of the shares in Satang, with the deal valued at ฿3.7 billion (Thai baht)  which is approximately $103 million.

This acquisition was facilitated by a subsidiary of Kasikornbank, Unita Capital, which boasts a share capital of around $102.8 million. Unita Capital has also launched three new subsidiaries that will focus on providing digital asset custody services, fund management, and developing blockchain infrastructure respectively. These subsidiaries include Orbix Custodian, Orbix Invest, and Orbix Technology & Innovation Co. Ltd. 

In comparison, Siam Commercial Bank (SCB), another major bank in Thailand, has also ventured into the crypto space. SCB announced it will acquire a 51% stake in locally licensed crypto exchange Bitkub. According to the terms of the agreement published by SCB, the bank will acquire the majority stake in Bitkub for $535 million. This move by SCB is significant as it pushes Bitkub into Southeast Asia’s small unicorn club with a valuation of just over $1 billion.

The role of Orbix and the main actors

Orbix Custodian, Orbix Technology and Orbix Invest are three startups founded by Kasikornbank (KBank) as part of its strategic entry into the digital assets space. These three companies play a crucial role in this acquisition as they will provide end-to-end digital asset services. They are expected to begin operations in 2024.

• Orbix Custodian is dedicated to digital asset custody and provides secure cryptocurrency custody solutions. Its goal is to support digital asset custodians.
• Orbix Technology focuses on the development of blockchain infrastructure. Its focus is on ensuring its clients have access to appropriate investment products and developing its technological capabilities and operations.
• Orbix Invest will focus on fund management in the crypto investment space. It aims to satisfy the needs of those looking to diversify their portfolios in the world of digital assets.

Kasetsart University’s participation in this acquisition is through one of its professors, Udomsak Rakwongwan, Professor and researcher at the Department of Mathematics at Kasetsart University and also one of the founders of FWX, a decentralized finance (DeFi) platform.

Udomsak Rakwongwan has highlighted K-Bank’s accelerated efforts in the crypto world. Intending to offer a wide range of crypto services approved in Thailand, K-Bank is emerging as a key counterpart of SCB in the digital assets space.

Impact on the Digital Assets Sector

The acquisition of Satang Crypto Exchange by Kasikornbank is expected to have a significant impact on the digital assets sector:

• The acquisition could provide users with increased access to digital assets and potentially more secure and diverse investment opportunities.
• For the crypto exchange, this acquisition could lead to increased trading volumes and a broader user base.
• This could mean a greater demand for crypto services as more traditional financial institutions venture into the crypto space.
• Kasikorn Bank has set an ambitious goal to capture 20% of the cryptocurrency market share in Thailand by the year 2024

Conclusion

The acquisition of Satang Crypto Exchange by Kasikornbank marks a significant milestone in the integration of traditional banking with the burgeoning digital assets sector. This move not only positions Kasikornbank as a forward-thinking institution ready to embrace new financial technologies but also signals a broader shift in the financial industry towards the acceptance and utilization of digital assets.

This acquisition could potentially pave the way for other traditional financial institutions to venture into the crypto space. As more banks follow suit, we could see an increased integration of digital assets into mainstream financial services. This trend could lead to a more robust and diverse digital asset ecosystem, providing users with more secure and diverse investment opportunities.

To sum it up, this acquisition is not just a game-changer for Kasikornbank but a potential harbinger of transformation for the entire crypto industry. It’s akin to catching the first glimpse of a new horizon in finance, where digital assets seamlessly blend with traditional financial systems. As we stand on the precipice of this exciting new world, one can’t help but marvel at the limitless possibilities that lie ahead.