The Bank of Thailand published a paper to unveil their plans of giving the similar status of traditional banks to virtual banks as well.
Plans are underway in Thailand to allow virtual banks to operate in the country from 2025. The Bank of Thailand revealed the same in a recently published paper titled the “Consultation Paper on Virtual Bank Licensing Framework.” The paper further mentions that the decision aims to increase economic growth and competition, while applications will commence in the later part of 2023 to enable virtual banks to work as financial services providers.
The paper stated, “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.” The Bank of Thailand then set certain frameworks for the virtual banks, including having expertise in digital services, data, and technology, providing full banking services, and adapting to customer needs.
The paper also mentioned the requirement of virtual banks to stick to the same regulations as traditional banks and put high emphasis on IT system continuity, corporate governance, and sound risk culture, amongst many others. Initially, the virtual banks would be subject to a restricted phase where they would be undergoing close monitoring. Recently, Thailand has been taking several initiatives to make itself a crypto hub, including framing plans for crypto regulations and revealing plans for releasing a central bank digital currency.