Bank of Thailand Plans to Allow Virtual Banks to Operate in 2023

The Bank of Thailand will allow virtual banks to operate. (photo: twitter @bankofthailand)

JAKARTA - The Bank of Thailand recently revealed plans to allow virtual banks to operate in the country for the first time. According to a Bloomberg report, financial companies will be able to provide that service in 2025.

The “Consulting Paper on Virtual Bank Licensing Framework” published by the central bank says that applications will be available later in 2023 that will enable virtual banks to act as financial service providers. This move focuses on increasing competition and boosting Thailand's economic growth.

The Bank of Thailand will issue three different licenses to interested companies by 2024. There are at least 10 parties interested in granting licenses.

Regulations and supervision 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 provides notes regarding this rule.

“Virtual banks must not start a race to the bottom through irresponsible lending, giving preferential treatment to related parties, or abusing a dominant market position that will pose a risk to financial stability, depositors and consumers as a whole.”

According to the central bank, the virtual bank will go under a "limited phase" during its first year of operations, which includes close monitoring to prevent financial systemic risks.

The Securities and Exchange Commission of Thailand recently announced plans to tighten rules for crypto, aiming to expand investor protection. A series of strict guidelines for crypto advertising is also being developed by the authority.

Cointelegraph reported that Thailand recently signed a technology cooperation agreement with Hungary to support the adoption of blockchain technology, amidst the rapid growth in demand for mobile payments, e-commerce, and cryptocurrencies in the country.

The country has already seen a number of crypto-related developments in 2022, including plans to pilot a central bank digital currency for around 10.000 users. Thailand is ranked eighth on the Global Crypto Adoption Index according to Chainalysis.