Mukaya “Tai” Panich, Chief Venture and Investment Officer of Siam Commercial Bank’s venture arm SCB 10X, imagines a world in which decentralized finance (DeFi) powers the back-end of traditional finance companies.
CryptoSlate talked to Panich about why Thailand’s oldest bank is bullish on DeFi and how its digital technology investment arm, which picks DeFi projects “with a global mindset that is focused on how to gain mass adoption,“ envisions achieving the DeFi/traditional finance integration.
Here’s what he said
Bullish on DeFi
The reason we want to invest in DeFi and be part of the ecosystem is that we want to understand and capitalize on DeFi, given its potential to meaningfully impact the financial industry.
That is why we are hosting our second annual ReDeFiNE Tomorrow virtual conference which happened this past week, bringing together industry leaders such as Stani from Aave, Jeremy from USDC, Rob from Compound, Michael from Fireblocks, and many others to discuss the latest innovations and developments in the industry.
I can see a world where DeFi can power the back-end of traditional finance companies. Traditional financial companies could potentially do customer-facing activities, like acquiring customers, providing them with a simple, easy understand and integrated interface.
DeFi can power the back-end, to reduce transaction times, lower costs, increase transparency, reduce settlement times etc. For this to happen, I think traditional financial companies like us should actively explore, invest and adopt DeFi. At the same time, DeFi companies should look to work with traditional financial companies to leverage their strengths.
What is on the roadmap for SCB 10X?
As for the area that our investments will focus on in DeFi, there are two major areas.
First, invest in the projects that parallel traditional finance, so we could learn how to do it in a decentralized way and at the same time, teach the startup about best practices we have developed from the traditional finance world.
This is true for the two DeFi projects that we invested in, Alpha Finance Lab and Anchor Protocol. Alpha Finance is a credit/lending protocol with leverage. Anchor protocol is disrupting the fixed income market, which is the biggest asset class in traditional finance with a market capitalization of $128 trillion.
Second, invest in the infrastructure of DeFi. I am always been an active investor in infrastructure, as investing in the picks and shovels is always a good idea. I feel that DeFi app/Dapp has been innovating really fast in the last year, and now the infrastructure for DeFi needs to be upgraded and catch up with all these innovations.
I am particularly interested currently in cross-chain communication and interoperability across different blockchains, blockchain network infrastructure – operational intelligence monitoring, and runtime security monitoring of DeFi protocols to prevent them from attacks and exploits.
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