Thai Banks Convert Carbon Credits into Blockchain-Based Digital Tokens

Thailand's major financial groups are testing new infrastructure for the carbon market, linking real-world reforestation and mangrove ecosystem restoration projects to blockchain-based digital tokens.

KASIKORNBANK and SCB have already launched pilot projects that enable carbon credits to be represented in tokenized form. The aim is to increase the transparency of transactions involving these assets, lower the barrier to entry for investors, and prepare the infrastructure for a potential mandatory carbon market in Thailand.

However, experts emphasize that while blockchain can make the history of a carbon credit transparent and immutable, it cannot independently verify that an environmental project is actually delivering the claimed results.

KBank Tests Tokenization of Forestry Credits

KASIKORNBANK is implementing a pilot project in collaboration with the Thailand Greenhouse Gas Management Organization (TGO), the Mae Fah Luang Foundation, Kubix Digital Asset, and Orbix Technology and Innovation.

As part of the project, verified T-VER carbon credits linked to the Doi Tung forestry project are being converted into digital tokens on the Quarix blockchain, developed by Orbix.

The project covers over 90,000 rai of forest watershed area and supports more than 11,000 local community residents.

The pilot aims to test several elements of the future infrastructure.

First, tokenization lowers the minimum investment amount: a single token represents a specific quantity of carbon equivalent.

Second, the digital system allows for the integration of the asset's entire lifecycle—from acquisition and secondary trading to the final retirement of the carbon credit.

Third, the TGO remains the official source of data regarding the credits. This is designed to prevent the double-counting of the same environmental outcome. Vichai Narongvanich, a division head at KASIKORNBANK, drew a parallel with the evolution of electric vehicles: he noted that green finance without digital infrastructure is akin to a mass shift to electric vehicles without building charging stations.

He also articulated the project's core principle:

"Blockchain does not create trust; it preserves trust."

This means that while the technology can record information and transaction history, the quality of the underlying data remains critical.

SCB Makes Carbon Investments More Accessible

SCB is developing its Blu Green Token project through Token X—an ICO platform within the SCBX group that is regulated by Thailand's Securities and Exchange Commission (SEC).

The token was created in partnership with Siam TC Technology, a subsidiary of the publicly listed company DITTO, and is linked to a registered mangrove forest restoration and management project covering an area of ​​over 70,000 rai.

The project's underlying asset consists of approximately 400,000 carbon credits.

In July, 400 million tokens were issued at a price of 1.20 baht each, raising over 480 million baht.

Investors gain the right to share in the economic value generated by future sales of the associated carbon credits. A protection mechanism is also in place: if the relevant credits are not sold, the investor receives a refund of their initial investment plus an accrued return of 3% per annum.

SCB representative Yunyong Thaicharoen highlighted four potential benefits of tokenization: expanded access to green investments, increased transparency, improved liquidity, and the ability to program specific rules directly into the digital asset.

He estimates that this model could eventually be applied not only to carbon credits but also to projects in renewable energy, sustainable agriculture, and water resource management. ## Why the Carbon Market Needs Blockchain

The main problem facing the traditional carbon credit market concerns trust in data.

For every credit, it is necessary to know where it was generated, the standard against which it was certified, the underlying environmental outcomes, and whether that same outcome has been double-counted.

According to World Bank representative Kwanpad Suddhi-Dhamakita, a single carbon credit can comprise around 80 different data elements.

The World Bank is developing the Climate Action Data Trust, a global infrastructure that uses blockchain to track carbon credits. Data presented at the event indicates that the system already covers approximately 90% of the world's registered credits.

The World Bank is also collaborating with the TGO to integrate Thailand’s T-VER credits into this system. This should enable banks and investors to assess the quality and origin of carbon assets based on verifiable data.

Technology Does Not Solve the Problem of Project Quality

However, panelists cautioned that digital infrastructure alone does not guarantee the quality of a carbon credit.

Jérôme Le Borgne of Veolia noted that a major limitation remains the scarcity of projects genuinely capable of generating verifiable and ...investment-attractive carbon credits.

According to him, while there is a large number of potential projects in Southeast Asia, there are far fewer initiatives that can actually be implemented and subsequently verified with measurable data.

He cited landfills in Thailand as an example. Many operate without landfill gas capture systems, resulting in significant methane emissions into the atmosphere.

The problem lies not only in the lack of digital tracking but also in the absence of infrastructure capable of physically addressing the environmental issue.

As Le Borgne noted:

"You might have a paper trail that confirms something, but that doesn't necessarily reflect the reality on the ground."

That is precisely why transparency must extend beyond transactions and documents to the environmental project itself.

It’s not just technology that matters, but community involvement

UNDP Resident Representative in Thailand, Niamh Collier-Smith, also emphasized the importance of data verifiability.

She noted that blockchain makes it possible to answer a simple question: "How can I prove this?"

At the same time, she warned that the transition from carbon assets to broader investments in natural capital would be more complex. Unlike emissions, the environmental impact of nature cannot be reduced to a single, universal metric.

The UNDP is developing projects where local communities participate in creating sustainable business models centered on forest areas.

This approach implies that technological solutions—including blockchain and artificial intelligence—must be designed with the interests of the people who directly manage natural resources in mind.

Thailand prepares infrastructure for a future carbon market

Pilot projects by KBank and SCB demonstrate that Thai banks are already testing the practical aspects of tokenizing real-world environmental assets.

For now, the focus remains on pilots and infrastructure development rather than a full-scale mandatory carbon market. However, industry participants view current projects as preparation for the potential expansion of regulation and demand for carbon assets.

For investors, tokenization potentially lowers the barrier to entry and increases liquidity, while for banks and regulators, it creates a digital mechanism for recording and tracking assets.

At the same time, the quality of the carbon credit itself remains the key factor: if the underlying data or the environmental project is unreliable, blockchain will merely provide a more transparent record of that unreliable information.

That is precisely why the development of the carbon market in Thailand will depend on three simultaneous elements: the quality of actual environmental projects, the reliability of the verification system, and the digital infrastructure's ability to ensure the transparent trading of the relevant assets.