Philippines to Expand the Use of Bitcoin

Philippines to Expand the Use of Bitcoin

As Bitcoin keeps increasing in price (its rate has nearly doubled to USD 10.3 per coin within last month, according to Coindesk.com), some countries’ regulators seek for new means of control over cryptocurrencies and initial coin offering.

In particular, Philippines’ SEC Commissioner Emilio Aquino recently claimed that the government may consider ISO a security, which will lead to the expansion of virtual currency use. “The direction is for us to consider these virtual currencies offerings as possible securities in which case we will apply the Securities Regulation Code,” explained Aquino.

Why is Philippines’ Government Concerned over Cryptocurrency?

The Securities and Exchange Commission (BSP) eyes the use of cryptocurrency as a raising capital, whilst the country’s central bank – the Bangko Sentral ng Pilipinas (BSP) – may allow a larger number of crypto exchanges to be carried in the Philippines. However, this may come true only under tight regulation.

At the BSP, we have an open-minded approach to fintech (financial technology). It means that we take a very active role in ensuring that our policies provide opportunities for innovation.

The Philippines’ government is concerned over the enlarging number of cryptocurrency-based transactions. As Aquino mentioned, they want to protect citizens who carry out operations and face the risk of fraud cases. According to the data, presented by the BSP in June 2017, certain major players send in and out of the country around USD 5 or 6 million per month.

Calata Corporation Case

The announcement of Aquino, dated November 22, was preceded by the Calata Corporation case. This agribusiness company was excluded from the Philippine Stock Exchange (PSE) for numerous disclosure breaches and, lately, affirmed its ambitions in the field of virtual currency exchange. At the end of October, Calata Corp. announced its plans to convert the shares into so-called “Calcoins”.

First steps on the way to Bitcoin legalization

Back in 2014, the BSP released its initial warnings for the consumers. This year, its Monetary Board has agreed on the regulatory framework for Bitcoin and other cryptocurrency exchanges in the Philippines. Notwithstanding the above, the MB made it clear that they are not going to focus on cryptocurrency creators, but on the entities that provide the exchange of, for example, Bitcoin into peso and vice versa. It means that each company of this type should meet the requirements, set by the BSP, and receive the certificate of registration.

By now, “there are at least five or six companies which have already been registered and endorsed by the BSP but these are limited [only] to money services businesses to address remittances being done by OFWs (overseas Filipino workers) to bring down the cost,”

Aquino informed. Although, according to central bank Governor Nestor Espenilla Jr., only two virtual currency exchangers are registered.

“At the BSP, we have an open-minded approach to fintech (financial technology). This means that we take a very active role in ensuring that our policies provide opportunities for innovation,” added Espenilla.

Even though the central bank is not ready to encourage the use of Bitcoin yet, it is clear that the Philippines wants to prevent money laundering, financial fraud, connected with the exchange of cryptocurrency, as well as to minimize terrorist supplying risks, by legalizing exchanging operations.