The Bank of Thailand has announced plans to allow virtual banks to operate in the country for the first time. According to a report from Bloomberg, financial firms will be able to provide services by 2025.
The central bank has published a “Consultation Paper on Virtual Bank Licensing Framework,” which states that applications for virtual banks to act as financial service providers will be available later in 2023. The move is aimed at increasing competition and boosting Thailand’s economic growth.
The Bank of Thailand will issue three different licenses for interested companies by 2024, with at least 10 parties expressing interest in the move.
Virtual banks will be subject to the same regulations and supervision as traditional commercial banks under the licensing framework, and applicants will need to meet certain requirements.
The central bank also emphasized that virtual banks should not engage in irresponsible lending, give preferential treatment to related parties, or abuse their dominant market position, which could pose risks to financial stability, depositors and consumers as a whole. Virtual banks will be under a “restricted phase” during their first years of operation, which includes close monitoring to prevent financial systemic risks.
Thailand has recently entered into a technology cooperation agreement with Hungary to support the adoption of blockchain technology, amid a fast growth in demand for mobile payments, e-commerce, and cryptocurrencies in the country.
