According to a report from the media outlet Bloomberg, Thailand will make it possible for the country’s first virtual banks to begin offering their services in the year 2025 as part of an effort to increase market competition, expand the availability of loans, and reduce transaction fees for companies and individuals.
Per the Assistant Governor Tharith Panpiemras, the Bank of Thailand intends to award three licenses of this kind in 2024 before beginning operations in the following year.
Based on what he indicated, there are perhaps ten parties who have shown an interest in applying for the permits. The submission of applications is slated to begin later on in this quarter, according to the report.
Virtual banks should not initiate a race to the bottom through irresponsible lending, give preferential treatment to related parties, nor abuse dominant market position which will pose risks to financial stability, depositors, and consumers as a whole.Bank of Thailand
What these virtual banks will bring to Thailand
According to the Consultation Paper on Virtual Bank Licensing Framework that was released by the central bank, applications that would enable virtual banks to function as financial services providers will be available later in 2023.
This measure is geared at enhancing competitiveness and contributing to the expansion of Thailand’s economy.
In addition, virtual banks will extend their services to new clients who are now being underserved at reduced prices, which will be to the overall customers’ advantage.
Conventional commercial banks are subject to the same rules and supervision as virtual banks, and virtual banks may provide the same types of banking services as traditional commercial banks.
In the year 2022, the nation saw a number of events linked to cryptocurrencies, one of which included plans to test a digital currency issued by the central bank for around 10,000 users.
In addition, the nation engaged in a technological memorandum of understanding with Hungary, with the goal of facilitating the use of blockchain technology at the end of last year.
As a result of the agreement, the two nations will discuss their experiences, identify areas of prospective collaboration that may be fruitful, and practice the finest methods available to develop and deploy cutting-edge infrastructure for the financial sectors of both countries, like crypto.