The world is constantly evolving, and the development of digital technology and the Internet has provided new opportunities for the financial sector and banks. Banking institutions are taking a close look at modern technology, including cryptocurrencies and the opportunities they can bring to the financial sector.
Banks need to become more accessible to both corporate customers and ordinary people. By allowing virtual banks, Thailand aims to increase competition in the financial sector and ensure economic growth.
According to a Bloomberg report, the Bank of Thailand has disclosed for the first time plans to permit virtual banks in the country. The financial firms will be able to offer their services by 2025. This will expand access to credit for the country's citizens and organizations and reduce costs for businesses and individuals.
A Consultation Paper on Virtual Bank Licensing Framework published by the central bank says the applications will be available as early as 2023, allowing virtual banks to act as financial service providers.
The Bank of Thailand will issue three different licenses to interested companies by 2024. The report says that at least 10 parties are interested in granting the licenses.
The rules and supervision for virtual banks will be the same as for traditional commercial banks under the licensing system. In addition, qualified applicants will have to meet certain requirements. Such measures will protect the rights of users of virtual banks.
Applicants must have a minimum authorized capital of 5 billion baht, which must be increased to 10 billion when the virtual bank is fully operational.
At the same time, virtual banks will not be allowed to open physical branches or operate their own ATMs.
In order not to abuse their virtual bank status and prevent financial fraud and manipulation, according to the central bank, virtual banks will be in a "limited phase" during their first years of operation.
This phase includes close monitoring to prevent financial systemic risks.
The creation of virtual banks will increase competition in financial services in Southeast Asia's second-largest economy. More competition will strengthen the banking system as a whole, encouraging existing players to improve their services and innovate.
Virtual banks will provide services to new underserved customers at a lower cost, which will benefit all customers.
The expansion of virtual banks will help increase access to financial services.
The Securities and Exchange Commission of Thailand recently announced plans to tighten regulations for cryptocurrencies in an effort to improve investor protection. The agency is also developing a strict set of guidelines for cryptocurrency advertising.
Thailand recently entered into a technology cooperation agreement with Hungary to support the adoption of blockchain technology amid rapid growth in demand for mobile payments, e-commerce and cryptocurrencies in the country.
The country has seen a number of cryptocurrency-related developments in 2022, including plans to launch a central bank digital currency for some 10,000 users.
Thailand is ranked eighth in the global index of cryptocurrency adoption by analytics company Chainalysis.