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The Bank of Thailand (BOT) has announced plans to launch virtual banks for the first time in the country. Financial companies will be able to provide services until 2025, according to a Bloomberg report.

The “Consultation Document on the Licensing Framework for Virtual Banks” has been published by the Central Bank and applications will be available later in 2023, which will allow virtual banks to act as financial service providers. The move focuses on boosting competition and boosting Thailand’s economic growth.

The BOT will issue three different licenses to interested companies by 2024. There are at least 10 parties interested in granting the permits, the report said.

The regulations and supervision of virtual banks will be the same as for traditional commercial banks under licensing. Furthermore, qualified applicants must meet certain requirements. The country’s central bank also noted.

“Virtual banks should not start a race through irresponsible lending, show preferential treatment to related parties and abuse a dominant position in the market, which would create risks for financial stability, depositors and consumers in general.”

According to the Central Bank, virtual banks will be in a “limited phase” during their first years of operation, which includes close monitoring to prevent financial systemic risks. Thailand’s Security and Exchange Commission recently announced plans to tighten crypto regulations with the aim of expanding investor protection. A strict set of guidelines for crypto advertising is also being developed by the authority.

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

The country has seen a number of crypto-related developments in 2022, including plans to test a central bank digital currency (CBDC) for approximately 10,000 users. Thailand ranks eighth in the Global Crypto Adoption Index by analytics firm Chainalysis.