Siam Commercial Bank (SCB), Thailand’s second largest bank, is creating a $600-800m fund, the Global Disruptive Technology Venture Capital Fund. It’s a joint venture with major Thai conglomerate Charoen Pokphand Group (CP Group), and its focus is blockchain, digital assets, FinTech, and “other emerging technology innovations”.
The joint venture has a 50:50 ownership structure and will be co-managed by CP Group and SCB 10X, the division set up in early 2020, which announced a $50 million blockchain, digital asset and DeFi fund in February.
In even bigger news, the entire bank is restructuring with a new holding company SCBX, transforming into a technology group. The move is in response to the changing role of banks in the face of decentralized finance, global platforms, post-Covid changes and new regulations.
CEO and Chairman Arthid Nanthawithaya spoke about changing business models “making traditional banking fees less and less important. Such conventional roles will no longer satisfy the emerging needs and expectations of consumers. Consumer reliance on banks will wane, which will unavoidably have a negative impact on the future value proposition for traditional banking investors.”
Hence it plans to expand into other types of financial business aggressively. “It is crucial to quickly enter this new arena of competition in order to survive in the next 3-5 years,” said the CEO.
Notably, last year JP Morgan made the unusual move of creating a new Onyx brand for its activities in the blockchain and digital assets sector. Standard Chartered has also been very active in setting up new ventures.
Meanwhile, on the venture fund side, Soopakij Chearavanont, Group Chairman of CP Group, said, “Blockchain technology will change the face of multiple industries including financial services, agriculture, public sector, healthcare and manufacturing by bringing traceability, transparency, reliability and authenticity in a trustless manner. We believe we are in the early days of the promising technology and its impact to various sectors.”
SCB 10X is currently working on a DeFi Launchpad incubator with plans for a hackathon early in October. Its partners include Ethereum scaling solution Polygon and Terra, which has DeFi derivatives and lending protocols with exceptionally high rates. Some of SCB 10X blockchain investments include Ripple, custody tech firm Fireblocks, investment bank Sygnum, and centralized crypto lender BlockFi.