SET-listed property developer SC Asset will soon launch an initial coin offering (ICO) in what will be the first of its kind in Thailand, after the Securities and Exchange Commission (SEC) approved trading of real asset tokens this month.
Real estate firms Sansiri and Ananda Development may be among the first to try out the digital fundraising option, according to a crypto investment firm who requested anonymity.
Sanjay Popli, chief executive officer at Cryptomind, a crypto consulting and investment firm, said the company is serving as a marketing consultant for a property firm, but declined to specify the company name. The firm is working on an ICO deal and is expected to launch by the second quarter of this year.
“If the deal is accomplished, Thailand will be the first country in Asia-Pacific to launch asset-backed tokens,” he said.
Mr Sanjay said the new digital token can help bridge traditional and cryptocurrency asset worlds.
The real estate-backed tokens will function like a digital version of real estate investment trusts (REITs), backed by real estate development projects that are tangible and traceable.
“They will be like a ‘micro’ REITs that people can buy with just a small amount of money. They can be bought and sold at any time as the digital asset exchange will operate 24/7,” he said.
However, the tokens would not likely attract crypto traders as they offer lower returns.
The SEC’s regulations on real estate-backed ICOs became effective this Monday, allowing property developers to raise funds from development projects that are 80% complete, or valued no less than 500 million baht.
The token issuers are required to comply with the market regulator’s rules and take responsibility accordingly, while the trustee is required to protect investors.
Manpong Senanarong, senior executive vice-president and head of issuer and listing division at the Stock Exchange of Thailand, said the real estate-backed tokens will be a new alternative to capital fundraising for developers besides seeking bank loans, new capitals or REITs.
“It will open the era of investment in digital asset tokens in Thailand, empowering traders and making it easier for them to invest with less money,” he said.
Mr Manpong said property funds and REITs were introduced to Thai investors 20 years ago but took a decade to be widely accepted as asset-backed investment instruments were quite new at that time.
However, Mr Manpong said the real estate-backed tokens may gain acceptance more quickly as most investors are already familiar with this type of investment.