The Bank of Thailand has announced plans to allow virtual banks to operate in the country for the first time. Financial firms will be able to offer services by 2025, a Bloomberg report shows.
The Consultation Paper on Virtual Bank Licensing Framework published by the central bank states that later in 2023 applications will be available that will enable virtual banks to function as financial service providers. The move focuses on increasing competition and boosting Thailand’s economic growth.
The Bank of Thailand will issue three different licenses to interested companies through 2024. There are at least 10 parties interested in granting permits, the report said.
Regulations and oversight for virtual banks will be the same as for traditional commercial banks under the licensing framework. In addition, qualified applicants must meet certain requirements. The central bank also noted:
“Virtual banks should not initiate a race to the bottom through irresponsible lending, favoritism with related parties or abuse of a dominant position that poses risks to financial stability, depositors and consumers overall.”
According to the central bank, virtual banks will be in a “constrained phase” for the first few years of operation, which will include close monitoring to avoid systemic financial risks. Thailand’s Securities and Exchange Commission recently announced plans to tighten crypto rules to broaden investor protections. The agency is also developing strict guidelines for crypto advertising.
Thailand recently struck a technology cooperation agreement with Hungary to support the adoption of blockchain technology amid rapidly growing demand for mobile payments, e-commerce and cryptocurrencies in the country, Cointelegraph reported.
The country has seen a slew of crypto-related developments in 2022, including plans to pilot a central bank digital currency for around 10,000 users. Thailand ranks eighth in analytics firm Chainalysis’ Global Crypto Adoption Index.