Bank of Thailand Gives Go-Ahead for Fintech Experimentation
Financial technology, also known as Fintech, is a booming industry. Entrepreneurs and startups all over the world bring much-needed innovation to the financial sector. However, existing regulations can nip these innovative concepts in the bud at an early stage. The Bank of Thailand wants to establish a regulatory Fintech sandbox to alleviate these concerns.
Creating A Modified Regulatory Ecosystem For Fintech
The Bank of Thailand is in the process of holding a public meeting through its website regarding Fintech regulation. Residents, startups, and entrepreneurs have a chance to share their opinions and concerns until October 15, 2016. A sandboxed regulatory environment will be established starting in Q1 of 2017.
Fintech is playing an ever-growing role of importance in the financial sector. By creating a sandboxed environment, the Bank of Thailand wants to help startups obtain their necessary licenses quicker. Right now, those licenses are needed whenever a product or service is to be commercialized.
Among the members eligible to join this new regulatory environment are the local commercial banks. Later on, non-bank institutions will be allowed to enter as well. It is worth noting most Fintech startups may be rejected, as the Bank of Thailand feels they should first go through the Fintech Club, or join an incubator programme.
It is evident this new effort is very localized, as only companies offering their products and services within Thailand will be allowed. To be more precise, none of the regulatory sandbox members can extend their offering to international customers. Everything will be developed in Thailand, and only offered to Thai clients.
No Immediate Impact On Existing Bitcoin Companies
While it is positive to see the Bank of Thailand acknowledge the importance of Fintech, this news may not affect Bitcoin adoption all that much. Companies who are exploring Bitcoin and blockchain may reap the benefit from this new sandboxed environment as a way to obtain licenses quicker. But since all products and services are limited to the local market, these companies would be limiting their capabilities somewhat.
That being said, most of the Bitcoin efforts in any country start out on a very local scale. This sandboxed environment can stimulate Bitcoin and blockchain enthusiasts to try and found their own company moving forward. It may also provide them with a partner in the financial sector. However, it appears the Incubator programme or Fintech Club may be the better option for Bitcoin companies in Thailand right now.
Speaking of Bitcoin companies in Thailand, there are some established platforms already. Coins TH and BX are two exchange and wallet platforms Bitcoin enthusiasts can use. It will be interesting to see if either company will apply for this sandboxed regulatory environment in the coming months.