The Bank of Thailand (BOT) has announced plans to allow virtual banks to operate in the country for the first time. Financial companies will be able to provide services by 2025, a Bloomberg report shows.
A ‘Consultation Paper on the Virtual Bank Licensing Framework’ has been published by the central bank, and applications will be available later in 2023, allowing virtual banks to act as financial service providers. The move focuses on improving competition and economic growth in Thailand.
The BOT will issue three different licenses to interested companies in 2024. At least 10 parties are interested in granting the permit, the report stated.
Regulation and supervision for virtual banks will be similar to traditional commercial banks under the licensing framework. In addition, qualified applicants must meet certain requirements. The country’s central bank also noted:
“Virtual banks should not start a race to the bottom through irresponsible lending, giving preferential treatment to related parties, or abusing a dominant market position that would risk financial stability, depositors, and consumers as a whole.”
According to the central bank, virtual banks will be in a “restricted phase” during the first years of operation, which will include close monitoring to prevent financial systemic risks. Thailand’s Securities and Exchange Commission recently announced plans to tighten rules for crypto, with the aim of expanding investor protection. A strict guideline for crypto advertising has also been developed by the authorities.
Thailand recently signed a technology cooperation agreement with Hungary to support the adoption of blockchain technology, amid rapid growth in demand for mobile payments, e-commerce, and cryptocurrencies in the country, Cointelegraph reported.
The country has seen several crypto-related developments in 2022, including plans to pilot a central bank digital currency (CBDC) for approximately 10,000 users. Thailand ranks eighth in the Global Crypto Adoption Index by analytics company Chainalysis.