KuCoin becomes first exchange to support Thailand’s tokenized bonds

In this post:

• Thailand’s SEC selects KuCoin to support the country’s G-Token program.
• KuCoin Thailand will work alongside a consortium of partners, including XSpring Digital, SIX Network, and Krungthai XSpring.
• The crypto exchange platform is also planning to issue around 5 billion baht ($153 million) worth of digital investment tokens.

Thailand’s Ministry of Finance has approved KuCoin to join a consortium to support the world’s first publicly offered tokenized government bond, the G-Token. The initiative makes KuCoin the first international crypto exchange to venture into tokenized government bonds.

KuCoin Thailand will work alongside partners XSpring Digital, SIX Network, and Krungthai XSpring. The consortium will handle subscriptions, redemptions, and listings, among other things.

Kucoin Thai plans to issue $153M worth of digital tokens

The exchange’s locally regulated arm said the G-Token will initially be listed on licensed domestic exchanges. The bonds will also be listed on KuCoin’s global platform after regulatory approval.

KuCoin Thailand is planning to issue around 5 billion baht ($153 million) worth of digital investment tokens. The company also said the tokenized government program aims at broadening retail investor access to sovereign debt.

“One big selling point of the token is that it allows more retail investors to become part of the digital economy.”

-Patchara Anuntasilpa, Director-General of the Public Debt Management Office.

Anuntasilpa said the G-Tokens will be used in the country’s currency budget borrowing plan to raise public funds. He also revealed that investors will be able to invest in the tokenized government bonds with as little as $3.

A KuCoin spokesperson mentioned that the firm’s strong regulatory footing in Thailand was the reason for selecting its sidearm as the inaugural global exchange for Thailand’s G-Token program. He added that the exchange’s local presence enabled the firm to form a strategic consortium with Thai partners. He also acknowledged that the initiative positioned the company as a trusted collaborator for the Ministry of Finance’s tokenized bond initiative.

KuCoin noted persistent challenges in building regulators’ confidence due to robust security against cyber threats and AML and KYC compliance in decentralized finance. The firm also cited volatility risks that differ from those of traditional bonds.

The cryptocurrency exchange also noted challenges regarding security and market liquidity. The firm said tokenized assets still face challenges in connecting global liquidity with public investors, which it hopes to address through both domestic Thai exchanges and its global platform.

KuCoin considers the G-Token initiative as a template for other governments. The company argued that the project could inspire similar models by combining the reliability of government-backed bonds with blockchain’s efficiency, transparency, and accessibility.

KuCoin plans to continue building a localized presence in other regulated nations for similar real-world asset initiatives. The company hopes to provide global connectivity and technology infrastructure support in the digital asset sector. 

The initiative follows a call by former Thai Prime Minister Thaksin Shinawatra for the issuance of stablecoins backed by government bonds in Thailand. He argued that there was no risk in allowing the trade of stablecoins and other digital tokens backed by tangible assets.  As previously reported by Cryptopolitan, KuCoin established its sidearm in Thailand in June as part of its plan to grow globally while fully complying with local laws.

Thailand seeks to establish a blockchain-based trading platform

Thailand is planning to establish a blockchain-based trading platform for securities firms to trade digital tokens. The Thai SEC deputy secretary general Jomkwan Kongsakul said in February that the initiative is expected to raise efficiency in the local capital market by removing existing hurdles. 

According to the report, the SEC approved four digital token projects for the new DLT debt instrument trading system. The system will offer full digitalization of bond trading for both primary and secondary markets, trading, investor registration, coverage of settlement, payment processes, and other features.

The SEC said the trading system will also support multiple chains with interoperability standards, though it did not specify the specific chains. Kongsakul also mentioned that there might be multiple chains for trade in the future. She also said the system will offer both tokenized traditional securities and electronic securities.

Binance CEO Nirun Fuwattananukul mentioned in October that there’s growth in Thailand’s crypto industry as it evolves into a more institutional market focus for both tokenized securities and crypto assets. In the same month, the country’s regulator proposed to allow funds to invest more in crypto exchange-traded funds in the U.S.