Thailand hopes to increase competition and economic growth by permitting virtual banks.
For the first time, the Bank of Thailand has announced intentions to enable virtual banks to operate in the country. According to a Bloomberg estimate, financial firms will be able to supply services by 2025.
According to the central bank’s “Consultation Paper on Virtual Bank Licensing Framework,” applications permitting virtual banks to function as financial service providers would be available later in 2023. The move aims to promote Thailand’s economic growth by encouraging competition.
By 2024, the Bank of Thailand will offer three distinct licences to interested enterprises. According to the study, at least ten parties are interested in issuing permissions.
Under the licencing structure, virtual banks will be subject to the same regulations and supervision as traditional commercial banks. Furthermore, qualifying applicants must meet specific standards. “Virtual banks should not launch a race to the bottom through irresponsible lending, give preferential treatment to associated parties, or exploit dominant market position, which will pose threats to financial stability, depositors, and consumers overall,” the central bank added.
Virtual banks will be subject to a “limited phase” during their initial years of operation, according to the central bank, which will include tight surveillance to prevent financial systemic threats. Thailand’s Securities and Exchange Commission recently announced steps to strengthen crypto regulations in order to increase investor protection. The authority is also developing a stringent set of criteria for crypto advertisements.
Thailand has signed a technical cooperation agreement with Hungary to assist the implementation of blockchain technology, despite the country’s rapid growth in demand for mobile payments, e-commerce, and cryptocurrencies, according to Cointelegraph.
In 2022, the country saw a number of crypto-related events, including plans to pilot a central bank digital currency for approximately 10,000 users. The analytics firm Chainalysis ranks Thailand sixth on its Global Crypto Adoption Index.