Bank of Thailand to allow first virtual banks by 2025

The Bank of Thailand has revealed plans to allow a virtual bank to operate for the first time in the country.Bloomberg report says financial firms will be able to offer services by 2025 show.

According to the Consultation Paper on Virtual Bank Licensing Framework issued by the central bank, the application will be available in the second half of 2023, allowing virtual banks to act as financial service providers. The move is focused on increasing competition and boosting Thailand’s economic growth.

The Bank of Thailand plans to issue three different licenses to interested companies by 2024. According to reports, there are at least 10 parties interested in granting permission.

Regulation and supervision of virtual banks are the same as traditional commercial banks under a licensing framework. In addition, eligible applicants must meet certain requirements. The central bank also said:

Virtual banks have launched a race to the bottom through irresponsible lending, favored parties, and abused their dominant market position to pose risks to financial stability, depositors, and consumers as a whole. You must not.

According to the central bank, the virtual bank will be in a “limited phase” for the first few years of operation, which will include close oversight to prevent financial systemic risk. Thailand’s Securities and Exchange Commission recently announced plans to strengthen cryptocurrency rules with the aim of increasing investor protection. The authorities are also developing strict guidelines for cryptocurrency advertising.

According to Cointelegraph, Thailand recently signed a technical cooperation agreement with Hungary to help adopt blockchain technology.

There are many crypto-related developments underway, including plans to pilot a central bank digital currency for around 10,000 users in 2022. Thailand is ranked 8th in the Global Crypto Adoption Index by analytics firm Chainalysis.