Thailand plans digital banking licenses; axes proposed crypto tax
Thailand’s central bank has started working on a regulatory framework for virtual banks in an aim to keep pace with consumer needs in the digital age.
Plans are to join regional countries such as Singapore, Malaysia and Indonesia in promoting financial technology to spur competition and digitalise banking services. Another target is to enhance financial inclusion of the country’s un- or underbanked population.
Bank of Thailand’s assistant director Roong Mallikamas said at a news conference on February 1 that the intention is to issue guidelines for digital banks by June and allow existing lenders and new applicants to seek licenses. The central bank also plans to scrap a current limit of three per cent of commercial banks’ capital funds on investment in financial technology, except digital assets, she said.
Embracing financial techology
Thailand is the latest country in Asia to embrace the concept of virtual lenders as companies such Ant Financial Services, Grab Holdings, GoTo, AirAsia and a number of others all engage in digital payment services and are eager to offer various digital banking services.
While Thailand lacks independent virtual banks, local and foreign lenders do offer various digital services in the country, including payments. Most recently, CIMB Thai Bank, the Thai division of Malaysia’s CIMB Group, said it would apply for a digital banking license as soon as it is offered by the Bank of Thailand as part of its digital strategy. And Singapore’s UOB has already introduced its digital banking service TMRW in Thailand with plans to build up a fully-fledged digital retail bank in the country.
“More competition and innovations”
The central bank would propose to provide more players access to key financial infrastructure such as the interbanking payment system and credit guarantees at more reasonable costs, Roong said.
“We expect to see more competition and innovations by allowing virtual banking and it will benefit depositors. No one will stay still. Existing players will also adjust,” she added.
The Bank of Thailand would also work on minimising “unnecessary regulatory burden or costs” to the service providers by pushing lenders to adopt financial technologies.
Plan for cryptocurrency tax scrapped
In related news, Thailand has axed a plan to levy a 15-per cent withholding tax on cryptocurrency transactions following a pushback from the country’s crypto traders.
Earned income on crypto trading or mining can be reported as capital gains on income taxes, tax officials said on January 31, according to a Financial Times report. The new rules would allow traders to offset their losses against gains made in the same year.
The change of plan followed warnings by stakeholders in the crypto industry that excessive taxation could kill off potential growth in the sector.
The Bank of Thailand, Ministry of Finance and the Securities and Exchange Commission said they now would issue guidelines for certain digital assets that support the financial system “without posing any systemic risk.”
Thailand’s central bank has started working on a regulatory framework for virtual banks in an aim to keep pace with consumer needs in the digital age. Plans are to join regional countries such as Singapore, Malaysia and Indonesia in promoting financial technology to spur competition and digitalise banking services. Another target is to enhance financial inclusion of the country’s un- or underbanked population. Bank of Thailand’s assistant director Roong Mallikamas said at a news conference on February 1 that the intention is to issue guidelines for digital banks by June and allow existing lenders and new applicants to seek...
Thailand’s central bank has started working on a regulatory framework for virtual banks in an aim to keep pace with consumer needs in the digital age.
Plans are to join regional countries such as Singapore, Malaysia and Indonesia in promoting financial technology to spur competition and digitalise banking services. Another target is to enhance financial inclusion of the country’s un- or underbanked population.
Bank of Thailand’s assistant director Roong Mallikamas said at a news conference on February 1 that the intention is to issue guidelines for digital banks by June and allow existing lenders and new applicants to seek licenses. The central bank also plans to scrap a current limit of three per cent of commercial banks’ capital funds on investment in financial technology, except digital assets, she said.
Embracing financial techology
Thailand is the latest country in Asia to embrace the concept of virtual lenders as companies such Ant Financial Services, Grab Holdings, GoTo, AirAsia and a number of others all engage in digital payment services and are eager to offer various digital banking services.
While Thailand lacks independent virtual banks, local and foreign lenders do offer various digital services in the country, including payments. Most recently, CIMB Thai Bank, the Thai division of Malaysia’s CIMB Group, said it would apply for a digital banking license as soon as it is offered by the Bank of Thailand as part of its digital strategy. And Singapore’s UOB has already introduced its digital banking service TMRW in Thailand with plans to build up a fully-fledged digital retail bank in the country.
“More competition and innovations”
The central bank would propose to provide more players access to key financial infrastructure such as the interbanking payment system and credit guarantees at more reasonable costs, Roong said.
“We expect to see more competition and innovations by allowing virtual banking and it will benefit depositors. No one will stay still. Existing players will also adjust,” she added.
The Bank of Thailand would also work on minimising “unnecessary regulatory burden or costs” to the service providers by pushing lenders to adopt financial technologies.
Plan for cryptocurrency tax scrapped
In related news, Thailand has axed a plan to levy a 15-per cent withholding tax on cryptocurrency transactions following a pushback from the country’s crypto traders.
Earned income on crypto trading or mining can be reported as capital gains on income taxes, tax officials said on January 31, according to a Financial Times report. The new rules would allow traders to offset their losses against gains made in the same year.
The change of plan followed warnings by stakeholders in the crypto industry that excessive taxation could kill off potential growth in the sector.
The Bank of Thailand, Ministry of Finance and the Securities and Exchange Commission said they now would issue guidelines for certain digital assets that support the financial system “without posing any systemic risk.”
