By 2025, the Bank of Thailand will permit the first virtual banks
The Bank of Thailand (BOT) has announced intentions to permit virtual banks to conduct business for the first time in Thailand. By 2025, financial institutions will be able to offer services, according to a Bloomberg report.
The central bank has released the “Consultation Paper on Virtual Bank License Framework,” and later in 2023, applications will be made available to allow virtual banks to function as financial service providers. The action aims to increase competitiveness and Thailand’s economic expansion.
By 2024, the BOT will grant interested businesses three license types. According to the study, at least 10 parties are interested in issuing permissions.
Under the licensing system, virtual banks will be subject to the same rules and oversight as conventional commercial banks. Additionally, qualifying candidates will need to fulfill a number of prerequisites.
The nation’s central bank added:
“Virtual banks should not initiate a race to the bottom through irresponsible lending, give preferential treatment to related parties, nor abuse dominant market position which will pose risks to financial stability, depositors, and consumers as a whole.”
The central bank asserts that during the first years of operation, virtual banks would be under a “restricted phase,” which entails careful supervision to guard against financial systemic risks. To increase investor protection, Thailand’s Securities and Exchange Commission recently announced intentions to tighten regulations for cryptocurrencies. Also, the authority is creating a stringent set of regulations for cryptocurrency advertisements.
Thailand and Hungary have recently signed a technical cooperation agreement to boost the implementation of blockchain technology. This comes as demand for mobile payments, e-commerce, and cryptocurrencies in the nation is rapidly increasing.
A number of cryptocurrency-related activities have occurred in the nation in 2022, including proposals to test a central bank digital currency (CBDC) with about 10,000 users. Thailand is placed eighth on the World Crypto Adoption Index by Chainalysis – an analytics company.
