Thailand is set to become the latest country to embrace virtual banking, with the Bank of Thailand announcing plans to issue three licenses in 2024, allowing operations to begin in 2025.
According to multiple sources, this move is aimed at increasing competition, widening loan access and reducing costs for both businesses and individuals.
Assistant Governor Tharith Panpiemras has stated that around 10 parties have expressed interest in applying for the licenses, with applications opening later this quarter.
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This move towards virtual banking in Thailand comes as technology companies, such as Ant Group and Grab Holdings, expand their financial services to meet rising demand in the region.
While the country currently lacks independent virtual banks, Bangkok Bank, the largest lender in Thailand, Kasikornbank and other local banks have been increasing their investment in digital services, including online accounts and payments.
"Higher competition will strengthen the overall banking system by prompting existing players to improve their services and innovations," Tharith stated earlier.
The central bank has announced that virtual banks will be under close scrutiny during their initial years of operation to prevent financial systemic risks. Additionally, Thailand's Securities and Exchange Commission has announced plans to enhance regulations for cryptocurrencies in order to increase investor protection. The authority is also working on a strict set of guidelines for advertising crypto assets.
As a result, virtual banks in Thailand will be required to comply with the same regulations and supervision as traditional commercial banks.
Still, they will not be permitted to open physical branches or operate their own ATM machines. The minimum registered capital for applicants will be 5 billion baht, which must be increased to 10 billion when fully operational.
The Bank of International Settlements has stated that the proliferation of virtual banks will increase financial inclusion but has also warned regulators to ensure consumer data is protected.
In other news, Israel’s chief economist is issuing recommendations for digital asset regulation.
