The Bank of Thailand has revealed plans to allow virtual banks to operate in the country for the first time. Financial firms will be able to provide services by 2025, a Bloomberg report shows.

The “Virtual Bank Licensing Framework Consultation Paper” published by the central bank says that the applications will be available later in 2023, allowing virtual banks to act as financial service providers. The 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 permits, the report says.

Regulations and supervision of virtual banks will be the same as those of traditional commercial banks under licensing. Additionally, qualified applicants will need to meet certain requirements. The central bank also noted:

“Virtual banks should not engage in a race to the bottom through irresponsible lending, preferential treatment to related parties, or abuse of dominant market position, which will pose risks to financial stability, depositors, and investors. consumers in general.

According to the central bank, virtual banks will be in a “restricted phase” during their first years of operation, which includes close monitoring to prevent financial systemic risks. The Securities and Exchange Commission of Thailand recently announced plans to tighten the rules for cryptocurrencies, with the aim of expanding investor protection. The authority is also developing a strict set of guidelines for crypto ads.

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

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

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