The Bank of Thailand will be permitting the country’s first virtual banks to open in 2025, targeting increased competition and economic growth.
The Bank of Thailand will be allowing the first virtual banks of the country to operate starting in 2025, aiming to foster competition within the financial sector and boost economic growth. According to the central bank’s Consultation Paper on Virtual Bank Licensing Framework, later in 2023, further details will be available alongside applications for virtual banks to act as financial services providers.
By 2024, the Bank of Thailand will be issuing three different licenses for interested companies, with “at least 10 parties interested in granting permissions.”
Approved virtual banks will need to still enforce the same regulations and undergo supervision just like traditional commercial banks under the licensing framework and there will be specified requirements for applicants to meet.
The Bank of Thailand also included that, “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.”
Additionally, during these virtual banks’ first year of operations, they will be placed in a “restricted phase,” which will entail closer monitoring to avoid financial systemic risks. The Securities and Exchange Commission, Thailand, has also just recently released new plans to tighten crypto regulations to reinforce protection policies for investors as well as advise on advertisements for related platforms, exchanges, and other businesses.
Since last year, Thailand has observed rapid growth development within the FinTech space. The country also has signed a technology cooperation agreement with Hungary to bolster blockchain adoption following Thailand leading digital payments integration in 2022, to meet growing demand for mobile payments, e-commerce, and cryptocurrency. The Bank of Thailand has also revealed plans to pilot a central bank digital currency for around 10,000 users.