Thailand’s oldest banking institution Siam Commercial Bank (SCB) took a step forward into the fintech industry by acquiring 51% or US$535 million worth of controlling stake in local cryptocurrency exchange Bitkub Online.
Following the announcement last November 2, Bitkub Coin, the native coin of the exchange tripled in value from US$0.98 to US$2.67 and has since stabilised at around US$2.34 as of press time.
This announcement helped Bitkub secure equity at around US$1.05 billion, making it the latest unicorn startup in Thailand. Unicorn refers to companies that possess or exceed a market valuation of US$1 billion.
SCB pushed through the investment as conventional banks across Southeast Asia are continuing to modernise in line with growing competition against tech giants and digital service e-payment providers.
SCB Chief Executive Officer Arthid Nanthawithaya told Nikkei Asia that digital asset exchanges rapidly gained popularity over the past few years and will continue to grow in the future. This fuelled the bank’s motivation to acquire Bitkub.
‘The move is in line with SCB Group’s strategy to upgrade to a financial technology group, meeting new consumer needs and entering a new competitive arena that will emerge very quickly in the next three to five years’, he added.
Amidst the announcement, the investor shares of SCB rose at 3.5%. This boosted the price of each share to ฿134.5 or US$4.07.
However, SCB still needs to wait for the approval of both the Bank of Thailand and the country’s Securities and Exchange Commission before it completes the acquisition. It’s expected that everything will be set by the first quarter of 2022.
The bank is also set up for a major reorganisation that will begin at its general meeting of shareholders on November 15. This will spearhead SCB’s transition to a holding company so subsidiaries including Bitkub exchange can operate freely from strict banking regulations.
‘Bitkub has reached a milestone by becoming an important part of Thailand’s digital economy infrastructure,’ Bitkub Capital Group founder and chief executive officer Jirayut Srupsrisopa said.
Srupsrisopa added that the local exchange is now becoming a necessary part of the infrastructure that’s critical to Thailand’s financial industry. Moreover, he noted that having a strong partner like SCB can help the exchange achieve its global level targets faster and more sustainably.
Founded by the royal family of Thailand in 1904, SCB gained popularity for its unique shareholder structure. A quarter of the bank’s funds at around 793 million shares are currently owned by King Maha Vajiralongkorn.
Get to know more about Thailand’s cryptocurrency updates here at Cryptoshimbun.