Thailand Siam Commercial Bank Backs DeFi Ecosystem 0 477

Thailand Siam Commercial Bank Backs DeFi Ecosystem

A new investment venture has been announced by one of the top banks in Thailand, Siam Commercial Bank, which will help it become a part of the growing decentralized finance (DeFi) space. According to an E27 report, SCB 10X, the venture capital arm of the bank, is now backing the DeFi ecosystem called Alpha Finance Lab. It was highlighted in the report that the new investment is in accordance with SCB 10X’s strategy of making investments in the early-stages. The head venture builder for the company, Kaweewut Temphuwapat, explained that they were dedicated to embracing and adopting innovative technologies. 

He said that Alpha Finance Lab appeared to be an opportunity for them to bridge the decentralized and traditional financial sectors. Alpha Finance Lab is backed by some prominent names, such as the Spartan Group and DeFinance Capital. This particular ecosystem is dedicated to building DeFi protocols and tools, with the aim of attracting interest in the sub-industry. Alpha Homora, the initial product of the company, operates as a protocol designed to leverage the positions of the investors in yield farming pools. No information was provided about any additional tools that the company might be developing. However, there is a strong chance that they will have an interesting product soon because they now have access to new funding.

This investment has come at a time when the DeFi space appears to be making a roaring return. After what seems to be a cooling-off period, it seems that DeFi bulls have returned with renewed hope, as well as deeper pockets. Last week’s data showed that the total crypto collateral that was locked in the numerous DeFi protocols had increased to reach an all-time high of $12.3 billion. Since then, the value has gone down, but it is quite obvious that the DeFi market is also reacting to the increase in the price of Bitcoin. 

Bitcoin had also surged after payment processor PayPal announced that it would be incorporating crypto payments in its platform from 2021 and the crypto has sustained this rise so far. Now, it seems that DeFi protocols are also benefitting from the gains. As far as Siam Commercial Bank is concerned, it has continued to gradually accept digital assets. Earlier this year, the bank made a bold move when it partnered with Azimo, a digital money transfer service, for launching an instant service for cross-border payments via RippleNet. According to the announcement, the service would facilitate transfers from Europe to Thailand. 

It aims to eliminate the challenges of finicky and costly global payments, with payments from Thailand and Europe now being made in less than a minute. According to the World Bank, Thailand is one of the main remittance destinations in the world, with almost $6.7 billion sent to the country every year. However, it is also one of the most expensive countries for sending and receiving money. Remittances between Thailand and Europe usually take more than one business for settlement. With Azimo, the payments can be cleared nearly instantly.

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IMF Says Russia and Iran May Use Crypto Mining for Monetizing Energy 0 42

The April 2022Global Financial Stability Report of the IMF has highlighted the consequences of the ongoing Russian invasion of Ukraine. The document said that the role of the US dollar was bound to be affected because of the conflict, as it would lead to the introduction of central bank digital currencies (CBDCs) and the global financial system’s resiliency would also be put to a test. The climate transition goals could also be put at risk because of the priorities associated with energy security. Another issue that would have to be dealt with in the coming years by lawmakers is the ‘cryptoization’ which is likely to occur because emerging markets are experiencing a widespread use of crypto.

IMF cited an increase in crypto trading volumes seen after the introduction of sanctions on Russia to back their statement. This included the financial penalties that had been imposed by Western nations on Russia because of its military invasion. The report said that such cross-border transactions were increasing in the long-term, which means that there would be challenges when it comes to imposing sanctions and managing capital flow. The IMF noted that crypto transactions have increased in both Russia and Ukraine because of the capital restrictions that have been imposed.

However, it is important to note that there has been a fall in liquidity in centralized exchanges where the hryvnia and ruble trading pairs are concerned. Therefore, using crypto exchanges for making large transfers has become rather impractical due to reduced liquidity. But, the IMF admitted that users do have the option of evading some measures via the crypto ecosystem because the identity verification requirements are quite lax in this industry. Hence, the international organization said that blocking new deposits of ruble and freezing crypto assets meant that users could have shifted to non-complying or less transparent crypto platforms and service providers.

Experts at IMF believe that both Russia and Iran could circumvent their respective sanctions via crypto mining. The nations could use their energy resources for generating revenue via crypto mining outside of the traditional financial system. Currently, the countries have a limited share of crypto mining activities, but there is a possibility that it could be increased, considering the size of the mining industry. The IMF quoted estimates showing that almost 11% of the mining revenues of bitcoin could have gone to Russia, which was around $1.4 billion per month, while Iran’s share had been 3%.

Bank of England Says Crypto Assets have Financial Stability Risks 0 81

On Thursday, the Financial Policy Committee of the Bank of England disclosed that they are working on developing a regulatory framework for digital assets. The central bank also made a reference to the sanctions that have been imposed because of the war between Russia and Ukraine in the statements. Bureaucrats and financial regulatory authorities all over the world have become increasingly concerned in recent times that Russia could take advantage of crypto assets to bypass the economic sanctions that have been imposed. The press statement of the BOE said that it was unlikely for crypto assets to provide Russia with a feasible way to get around sanctions at a large scale for now, but there was a possibility they could do so.

Therefore, it is a must to ensure that there are effective public policy frameworksthat can accompany innovation in crypto assets for maintaining the integrity and trust in the financial system. The crypto economy has been highly criticized by some members of the Bank of England for quite a while. Last year in mid-November, Andrew Bailey, the Governor of the Bank of England, had expressed his concerns about the adoption of bitcoin as legal tender in El Salvador. Sir Jon Cunliffe, the deputy governor for financial stability for the central bank, said in the following month that prices of crypto assets could drop to zero.

On Thursday, the report of the FPC talked about financial stability. The committee of the central bank noted that the FPC is assessing the risks to the financial system’s stability and it has concluded that these are currently limited. This is because their size remains limited for now and they are not that connected with the wider financial system. However, the FPC said that if they continue to grow at the same pace, and if they become interconnected with the overall financial system, then these crypto assets could pose a risk to the stability of the financial system.

Since the conflict between Russia and Ukraine began, politicians and lawmakers all over the globe have been discussing, developing, or even proposing laws aimed at regulating and researching digital currencies. The FPC’s statements on Thursday show that the BOE wants to classify crypto assets in the same category as it does traditional financial assets. Not only does the FPC plan on developing a regulatory framework that would govern digital assets, it has also mentioned stablecoins.

The FPC said that a major stablecoin that does not have a reliable deposit guarantee could turn out to be a risk to the UK’s financial system. According to the committee, if they introduce a systemic stablecoin, which is backed through a deposit mad with a commercial bank, it would result in significant risks to the stability of the financial system. All of this talk about crypto has been brought forward because of the Russian-Ukraine conflict and the possibility of the former using cryptocurrencies to evade the tough economic sanctions that have been imposed by Western nations due to its actions.

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