Establishing virtual banks in Thailand will become legally possible for the first time in the country's history. As the government of Thailand works to increase competition and do other things, the country's central bank, the Bank of Thailand, has announced its intention to launch virtual banks.
In addition, the Southeast Asian nation aspires to lessen the financial burden placed on businesses and individuals while simultaneously increasing the availability of loans. Improving the national economy is one of the primary foci of this initiative.
Thailand Ready to Offer Virtual Banks
The Bank of Thailand disclosed (1) in a document titled "Consultation Paper on Virtual Bank Licensing Framework" that the application that would make it possible for virtual banks to offer banking services will be accessible in the year 2023.
Even though the application won't be available until the first quarter of 2023, ten parties are interested in submitting an application for the permits. It has been brought to everyone's attention that the standards that need to be satisfied are quite specific.
In the meantime, the central bank has announced that it will hand out three permits in 2024, with the full launch of operations scheduled for 2025.
According to the licensing structure, the conventional financial institutions and virtual banks in Thailand will be governed by the same rules and supervision in their daily business operations. Central Bank Said:
"Online banks should not launch a race to the bottom by reckless lending, preferential treatment to associated parties, or exploit dominant market position," which will pose concerns to economic stability, deposits, and customers as a whole, according to the statement. "
In addition, the Bank of Thailand intends to place the virtual banks in a "restricted phase" for many years following the commencement of their operations. During this stage, adequate monitoring would eliminate the potential for systemic financial concerns.
This comes as the country's Securities and Exchange Commission recently revealed its intention to tighter crypto legislation to heighten the safety level afforded to investors.
In the wake of FTX's failure, many governments worldwide are revising and strengthening the crypto legislation in their respective countries. The officials of the Thai SEC mentioned the collapse of the Celsius Network, Zipmex, Three Arrows Capital, and TerraUSD in addition to the crash of the currency exchange market.
Authorities in Thailand are concerned about the rise in crypto advertising because it may put consumers in a vulnerable position regarding their investments. Because of these issues, the authorities deemed the industry of digital assets to be "vulnerable" and determined that it required oversight.
Thai Government's Efforts to Boost Economy
A recent business partnership between Thailand and Hungary involved an organization dealing in technology. As inhabitants of Thailand continue to demand crypto currency, cashless commerce, e-commerce, and other related services, the Thai government attempted to garner support for using blockchain technology.
In 2023, Thailand saw several advances in crypto currency, including launching a pilot program for the country's central bank's digital currency.
Tharith Panpiemras, the Assistant Governor of the Bank of Thailand, made the following statement regarding the most recent initiative concerning virtual banks: "increasing competition will improve the entire banking industry by promoting existing companies to enhance their services and innovations."
New virtual banks will introduce their services to new neglected clients while simultaneously lowering their expenses, which will be to the benefit of customers as a whole.