Crypto Exchanges Coming to the Philippines in Droves

The Philippines is becoming a magnet due to liberal local regulations, as well as robust interest in crypto coins.

On Monday, the Bango Sentral ng Pilipinas (BSP), the country’s central bank,  confirmed that there are currently 29 companies that have submitted digital currency exchange applications to try to get a foothold at the local cryptocurrency market.

BSP Deputy Governor Chuchi Fonacier stated:

“There are 29 pending applications under different stages of processing, i.e., ongoing evaluation, awaiting submission of documentary requirements, and for presentation of business model.”

Currently, only Betur Inc. and Rebittance Inc. have been granted licenses by the BSP to operate a virtual currency exchange in the Philippines. Betur’s application was approved in September 2017 while Rebittance’s was approved a month later.

Aside from the pending applications, several foreign companies are in various stages of planning to put up cryptocurrency exchange operations in the Philippines either to cater to the domestic market or in the country’s economic zones.

In anticipation of the growth in the virtual currency space especially in remittance and payment services, the BSP issued Circular 944 in February last year creating a formal regulatory framework for digital currency exchanges.

The circular also recognized “that virtual currency (VC) systems have the potential to revolutionize delivery of financial services, particularly for payments and remittance, in view of their ability to provide faster and more economical transfer of funds, both domestic and international, and may further support financial inclusion.”

Last January, the BSP issued an advisory detailing best the practice for consumers and the public about transacting using virtual currencies.

Manageable risks

The advisory follows a statement by BSP deputy director Melchor Plabasan in October last year expressing his optimism that the risks associated with cryptocurrencies, such as Bitcoin, are manageable. He said:

“[Bitcoin is] like any other monetized instrument [and even] an investment instrument. There are risks, but essentially it can be managed. If you want something that is fast, near real-time and convenient, then there’s the benefit of using virtual currencies like Bitcoin,”

In addition, the BSP is seeking coordination with the country’s market regulator, the Securities and Exchange Commission (SEC) to draft common rules on initial coin offerings (ICOs) to prevent frauds and other criminal activities using the crowdfunding strategy to commit crimes in order to protect the public.

BSP Governor Nestor Espenilla made the call as he called on companies seek to take advantage of the “strong growth potential in this space”.

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