Siam Commercial Bank (SCB), Thailand’s oldest bank, has announced the acquisition of a controlling share in Bangkok-based cryptocurrency exchange Bitkub. The transaction, valued at THB 17.85 billion (approximately Rs. 3,994 crores), is slated to close in the first quarter of 2022, barring any regulatory issues, and is intended to provide the bank with “new growth value in the long term within a new financial world.” Although this merger may not have immediate worldwide consequences in terms of scale, the SCB-Bitkub agreement will go down in history as one of the most significant crypto mergers and acquisitions ever.
Bitkub is one of the few regulated crypto exchanges in Thailand, having been established in 2018 and registered by the Thai Securities and Exchange Commission (SEC). From January to September 2021, the exchange claimed a trading volume of over $30 billion (approximately Rs. 2,23,772 crore), making it the country’s largest crypto exchange by a considerable margin, with a market share of over 90%.
SCB has been around for more than 114 years and is no stranger to the crypto realm. SCB 10X is the bank’s venture capital arm, which invests in blockchain and decentralized finance (DeFi) firms. SCB10X is a cryptocurrency investor who has stakes in Ripple, BlockFi, and Alpha Finance.
SCB also started using Ripple’s payment network, RippleNet, to facilitate cross-border payments using digital money transfer provider Azimo in April 2020.
However, Thailand’s crypto economy is not without its regulatory challenges. The Thai Securities and Exchange Commission (SEC) banned crypto exchanges from trading meme currencies like Dogecoin and Shiba Inu in June of this year. Non-fungible tokens (NFTs)-based collectibles and fan tokens were also placed on hold.
Bitkub had a run-in with Thailand’s Securities and Exchange Commission earlier this year when it was instructed to temporarily stop down and rectify issues that were causing major disruptions.
The regulator gave Bitkub five days to rectify the faults that caused three outages in January amid heightened trading volume after ordering a closure. The site was purportedly unavailable for 16 hours during one of the three recorded disruptions before trading resumed.