The Bank of Thailand has revealed its plans to allow virtual banks to operate in the country for the first time. This will allow financial firms to provide their services by 2025, according to a report by Bloomberg.

The central bank has published a “Consultation Paper on Virtual Bank Licensing Framework” which states that applications for virtual banks to act as financial service providers will be available later in 2023.

The move aims to increase competition and boost Thailand’s economic growth.

The Bank of Thailand will issue three different licenses for interested companies by 2024, with at least 10 parties expressing interest in the move.

Virtual banks will be subject to the same regulations and supervision as traditional commercial banks under the licensing framework, and applicants will need to meet certain requirements.

The central bank also emphasized that virtual banks should not engage in irresponsible lending, give preferential treatment to related parties, or abuse their dominant market position, which could pose risks to financial stability, depositors, and consumers as a whole.

Virtual banks will be under a “restricted phase” during their first years of operation, which includes close monitoring to prevent financial systemic risks.

Thailand has recently entered into a technology cooperation agreement with Hungary to support the adoption of blockchain technology, amid a fast-growing demand for mobile payments, e-commerce, and cryptocurrencies in the country.