THAILAND Law and Practice Contributed by: Wongsakrit Khajangson, Panupan Udomsuvannakul, Koraphot Jirachocksubsin and Pitchaya Roongroajsataporn, Chandler Mori Hamada
Issuance of Legal Framework for Virtual Banks Due to the rapid development of digital finance, almost all business operators in Thailand, whether banks or non-banks have been focus - ing on providing services via digital channels. In 2024, the MOF issued a notification outlining the criteria, conditions, and procedures for applying for a license to establish branchless commercial banks, also known as “virtual banks.” Concur - rently, the BOT announced regulatory guidelines to accommodate the operations of future virtual bank licensees. These new frameworks aim to promote financial inclusion and enhance compe - tition within the financial market. Five applicants were in the first round of applications, which concluded in September 2024. The names of those approved by the MOF to establish virtual banks are anticipated to be announced by mid- 2025. Licensed operators will be required to pre - pare and commence operations within one year of the MOF’s approval. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models The major players in the Thai fintech industry are predominantly financial institutions and tra - ditional non-banking financial institutions, which have adopted technology for their services to facilitate customers’ needs and to increase their market share. Other players include venture cap - italists and start-ups. The main fintech business models in Thailand are as follows. E-money, E-wallets and E-payment E-money, e-wallet and e-payment service pro - viders are some of the most significant play -
risks of each digital asset type. Key changes to the proposed draft bill include redefining digital assets as crypto assets to set out a positive list that clearly defines the types of digital assets that fall under regulation, improving the regula - tory approach for ICOs from an approval-based system to a disclosure-based system, aiming to streamline the process and enhance trans - parency, prohibiting digital assets as means of payment, and adjusting provisions regarding penalties and prescription for certain offences under the Digital Assets Decree. The bill is cur - rently under development and is expected to be enacted shortly. Digital Transformation in the Thai Financial Sector In addition to the surge in digital payments in Thailand, digitalisation has been systematically integrated into diverse facets of the country’s financial services industry. This evolution is evi - dent in: • the increasing number of service providers – and subsequent rising competition – in the digital savings or e-savings market; and • the enhancement of regulatory sandboxes, coupled with the relaxation of certain legal restrictions, aims to promote a more diverse range of digital service experiments within Thailand’s financial sector, including program - mable payment and digital assets, which will enable authorities to identify appropriate measures to manage the risks associated with such financial technologies while ensur - ing adequate protection for users. Furthermore, there has been progress in open data initiatives to empower consumers to trans - fer their data conveniently and securely from one provider to another, enabling them to access superior services.
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