Thai Banks Bet on Blockchain to Make Carbon Credits Trusted

 

Tokenised mangrove credits and a global registry are moving from concept to pilot – but Veolia warns the hard part is still what happens on the ground.

 

Thailand's banks are quietly building the plumbing for a carbon market that does not yet legally exist. Whether it works will depend less on the technology than on whether the projects underneath it stand up to inspection.

 

That was the balance struck at the Nation Visionary Club Roundtable, where two of the country's largest financial groups presented live tokenisation projects, the World Bank set out a global registry infrastructure, and the world's largest environmental services company warned that a clean paper trail is not the same as a clean landfill.

 

 

The charging station problem

Dr Wichai Narongwanich of KASIKORNBANK put the case for digital infrastructure in blunt terms. Green finance without digital infrastructure, he said, is like putting everyone in electric vehicles without building charging stations: the destination is right, but only a tiny fraction of the population can get there.

 

Capital alone, he argued, cannot drive the transition.

 

Digital rails do three specific things: they drastically lower the cost of proof, they lower the minimum entry point for investors, and they remove operational friction by automating settlement and bypassing administrative intermediaries.

 

KBank has built a digital asset ecosystem under its Orbix arm, spanning investment, exchange, custody and blockchain technology.

 

 

 

 

Within the Bank of Thailand's regulatory sandbox, and in partnership with the Thailand Greenhouse Gas Management Organisation (TGO), the Mae Fah Luang Foundation, Kubix Digital Asset Co. and Orbix Technology and Innovation Co., it launched what it describes as Thailand's first carbon credit tokenisation pilot, converting verified T-VER forestry credits into digital tokens on Orbix's proprietary Quarix blockchain.

 

The pilot tested four propositions.

 

Retail access: each token represents a set unit of carbon dioxide equivalent, collapsing the minimum ticket size.

Full lifecycle execution: not just trading, but subscription, secondary trading and final retirement of the credit.

Registry integrity: TGO remains the single authoritative source of truth, which is how double counting is prevented.

And real-world asset linkage: the underlying credits come from the Doi Tung Development Project, covering more than 90,000 rai of watershed forest and supporting over 11,000 community members.

 

 

His framing of the technology was deliberately modest.

 

"Blockchain does not create trust; it preserves trust," he said.

 

If the baseline data is weak, tokenisation simply makes bad data permanent. The bank is not expecting heavy trading volumes yet.

 

The point, he said, is to have market-tested infrastructure in place before a mandatory carbon market arrives.

 

 

From mangroves to the retail investor

Dr Yunyong Thaicharoen of SCB set out four benefits of tokenisation: the democratisation of green investment, greater transparency and flexibility of the underlying asset, improved liquidity, and programmability – the ability to embed rules on distribution, environmental conditions and reporting directly into the token.

 

 

 

He pointed to Blu Green Token, issued via Token X – the SEC-regulated ICO portal within the SCBX group – in partnership with Siam TC Technology, a subsidiary of listed firm DITTO.

 

The token is linked to a registered mangrove restoration and management project covering more than 70,000 rai, with around 400,000 tonnes of carbon credits as the underlying reference asset.

 

Some 400 million tokens were issued at 1.20 baht each, raising more than 480 million baht in the July offering.

 

 

 

Investors gain a right to participate in the economic value generated by future carbon credit sales, with a protection mechanism returning principal plus a cumulative 3 per cent annual return should the referenced credits fail to sell.

 

"It serves as an important milestone," he said, "because it demonstrates that tokenisation can connect three things: environmental projects, capital market funding, and individual investors."

 

He expects the model to extend beyond carbon into renewable energy, sustainable agriculture and water projects.

 

Asked how Thailand compares regionally, he was candid. Hong Kong leads as a digital hub, with an international ecosystem, a deep institutional investor base, tokenised government green bonds since 2023 and more than US$32 billion in sustainable bonds issued by the end of last year.

 

Thailand's advantages lie elsewhere: a sophisticated domestic bond market, strong banks, growing regulatory support and, crucially, a real-economy base with land capable of generating carbon credits.

 

The opportunity, he suggested, is to become ASEAN's leading platform for transition finance.

 

 

Eighty data points per credit

Dr Kwanpadh Suddhi-Dhamakit of the World Bank described the institutional layer beneath all of this. Carbon credits, he said, are the first environmental asset on course to become a financial asset class in their own right, because they have both supply and demand.

 

To underpin integrity, the World Bank has been building the Climate Action Data Trust, a global infrastructure that tracks credits using blockchain.

 

A single carbon credit carries around 80 data points – how it was originated, which standard was applied, and whether it has been counted elsewhere.

 

The Trust now covers around 90 per cent of the world's registered credits, and the Bank is working with TGO to bring Thailand's T-VER credits onto the platform so that banks and investors can price integrity rather than take it on faith.

 

 

The reality check

Jerome Le Borgne of Veolia provided the counterweight. The binding constraint, he argued, is not the absence of digital rails but the absence of projects worth putting on them.

 

"One of the main challenges is that there are not many projects that are really investable or that can generate really auditable carbon credits in a transparent way," he said.

 

Southeast Asia has no shortage of proposals; it has a shortage of ones that can actually be executed.

 

"All those projects are extremely attractive, sexy, and I think mangroves look good," he noted drily. But carbon finance is also needed for far less glamorous work.

 

Thailand has landfills operating without gas capture, releasing large volumes of methane daily, in an industry so fragmented that substantial solutions are hard to organise.

 

 

Veolia's landfill remediation and new-build project in Serbia, he said, was financed precisely because it delivered a direct, measurable impact on carbon, biodiversity and other metrics at once.

 

His deeper concern was the gap between compliance on paper and compliance in practice.

 

"You can have a paper trail that says something, but it's not the reality on the ground," he said. "Every manufacturer in Thailand will say it handles its waste according to law, yet there is not enough treatment infrastructure for all of them to do so. So somewhere in the process, there is a gap – so the concept of transparency is extremely needed."

 

 

Keeping people in the frame

Niamh Collier-Smith, UNDP Resident Representative in Thailand, said blockchain's real contribution is answering a single question for consumers and businesses alike: how can I prove it?

 

She described work with Ecuadorian cocoa farmers several years ago that produced what she called the first chocolate bar made using full blockchain traceability, allowing consumers either to take a discount or to direct value back to the growers.

 

"Everybody in the chain wins," she said.

 

Her warning concerned what comes after carbon. Carbon has the advantage of a single measurable metric; nature does not. If the indicators for nature-positive investment are designed top-down, she said, people will be left behind again.

 

UNDP's Tiger Landscape Investment Facility works with communities who have been custodians of forest landscapes for generations to design nature-positive businesses from the ground up.

 

"Whether we're applying blockchain or AI, we start with their voices at the heart of the solution."

 

UNDP is also working with Thailand's Securities and Exchange Commission on an SDG dashboard tracking every listed company's progress by sector, expected within a year.

 

Progress looks strong on many goals and weak on climate – which, she noted, may partly reflect the fact that climate data is the most trustworthy, thanks to mandatory emissions reporting under the SEC's One Report.

 

 

Martin Venzky-Stalling of the JFCCT offered a final caution: build the tools, but do not lose the human connection or construct markets and layers more expensive than the problem they are meant to solve. Some, he noted, regard carbon credits as a temporary mechanism – useful until targets are met, and no longer.