Bank of Thailand Unveils Banking Initiatives to Support Digital Economy

Bank of Thailand, digital economy

​The Bank of Thailand (BOT) has outlined a fresh set of banking initiatives designed to position the financial sector for a sustainable digital economy, the country’s central bank announced Friday (March 25).

BOT’s proposals included provisions for open and virtual banking that would be implemented by year’s end. The recommendations were subject to public hearings in February.

“Most of the comments agreed with the guiding principle to strike the appropriate balance between promoting innovation and managing risks amid the transition to the digital economy and sustainable growth,” BOT said.

The three key policy directions include leveraging technology and data to drive innovation through competition, open infrastructure and data; managing the transition to the digital economy and sustainability; and shifting from stability to resiliency when it comes the supervisory framework and safeguarding the financial system from risk.

Additionally, most feedback pointed to the significant challenge of implementing such policies to deliver concrete and positive results.

Specifically, BOT said it should provide clear guidelines on the three directions, especially to create a level playing field that encourages competition and innovation for existing financial institutions and startups. The central bank highlighted issues such as permission to launch a bank with digital banking services or a virtual bank.

BOT said it will incorporate comments and recommendations to improve the policy guidelines for repositioning Thailand’s financial sector with relevant stakeholders, the bank wrote.

One thing is clear. Thailand is not ready for cryptocurrencies to pay for goods and services, noting tokens could pose a threat.

Read also: Thailand Bans Cryptocurrency Use

This week, the Securities and Exchange Commission, the agency that oversees capital markets in the Southeast Asian nation, said it has discussed the risks and benefits of digital assets with the BOT.

Both determined there’s a need to regulate the use of digital assets as a medium for payment of goods and services because it may impact the stability of the financial system and the overall economy.