AirAsia, the company that pioneered the low-cost airline model in Southeast Asia has announced its maiden venture into the realm of FinTech and financial services. Led by Chief Executive Tony Fernandez, a businessman known for his relentless search for new ideas and willingness to take risks, AirAsia is now planning on launching its own cryptocurrency and an initial coin offering (ICO).
Given that ICOs are generally a practice more prevalent among young startups, AirAsia’s entry into the arena will likely make it the most established and highest-valued consumer business in the world to have embarked on that path. However, it is not the only established business to have done so.
Earlier in 2018, messaging app Telegram launched its own ICO, raising over $850 million in pre-ICO. All goes well, the Telegram ICO could raise somewhere around $2 billion in total.
ICOs worldwide collectively raised more than $6 billion last year alone, with Singapore and Southeast Asia being at the forefront of this new phenomenon.But unlike most other companies taking the ICO route, AirAsia already has an ecosystem of services where the new cryptocurrency can be used. That in itself is a big advantage considering that a digital currency that has meaningful real-life use immediately after coming into existence is bound to have an edge over those that don’t.
“We have two things that are very interesting which will have relevance to ICOs, one is our loyalty card where we have [loyalty program] BIG Points, and I think those BigPoints can be easily transferred to the blockchain,” said the AirAsia CEO.
“We have a product that can be a currency in Big Loyalty, [and] we’re building a payment platform so the two can marry quite nicely. We have an ecosystem that enables you to use that currency, there’s no point having a currency that can’t be used,” he added.
As of today, AirAsia has not commented on how much it expects to raise if/when its proposed ICO takes off . It is worth mentioning here that in Malaysia, the Southeast Asian nation where the airline is listed, regulators introduced a new framework for cryptocurrencies last month. Among other changes, the new regulations also come with more teeth to regulate ICO schemes.
Fernandez has virtually made it clear that AirAsia is looking to enter the financial services market as aims to grow to 100 million customers worldwide. Apart from riding the crypto wave to enable “cash-less” flying, the company also plans on offering insurance services and loans in an effort to aid entrepreneurs and small & medium enterprises (SMEs).
He also explained that the decision to launch the ICO is not just an arbitrary call to expand the company’s horizon. “I like [the idea of an ICO] because it just takes cost out of my system,” he told TechCrunch.