BANGKOK – Thailand’s central bank is planning to approve the first virtual banks by 2025 to promote competition, expand loan channels, and lower the cost of borrowing for businesses and individuals. The move is part of the country’s efforts to promote innovation and growth in the digital economy.

According to Tharith Panpiemras, Assistant Governor of the central bank, the bank plans to issue three licenses in 2024, and about ten companies have expressed interest in applying for the licenses. Applications will open later this quarter.

Under the new regulatory regime, virtual banks will be subject to the same regulations as traditional commercial banks. Qualified applicants will need to meet certain requirements, such as having a solid track record and adequate capital.

The central bank has emphasized that virtual banks should not pursue profits recklessly through irresponsible lending, should not give preferential treatment to related parties, and should not abuse their market dominance, which would pose a risk to financial stability, depositors, and consumers.

During the first few years of operation, virtual banks will be in a “restricted phase,” which will include close monitoring to prevent systemic risks to the financial system. The Securities and Exchange Commission of Thailand recently announced plans to implement stricter regulations on digital assets to strengthen investor protection.

Thailand is also becoming an increasingly important player in the digital economy, ranking 8th in the world in the Chainalysis Global Cryptocurrency Adoption Index.

The move by the central bank is seen as a step in the right direction for the country’s economy, as it will provide more options for businesses and individuals to access financing and promote innovation in the financial sector. This move is expected to increase the competition in the market, which in turn will lead to better services and lower costs for customers.

It will be interesting to see how the virtual banks perform in the market and how they will be able to compete with traditional banks. The central bank’s decision is expected to be a game changer for the banking sector in Thailand and it will be closely watched by other countries looking to promote digital innovation in their own economies.

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Filed under: Bitcoin - @ January 29, 2023 3:26 am