Philippines Starts to Embrace Cryptocurrency


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Whereas some parts of the world continue to crack down on cryptocurrency, the Philippines decides to join the tide by creating an economic zone that will facilitate businesses revolving around the emerging technology.

Cryptocurrency-Friendly

However, even before announcing the new economic zone, the Philippines is already recognized as the country with the most regulatory progress in the area when compared to the country’s ASEAN peers.

“Among the five ASEAN countries we survey, the Philippines has made the most regulatory progress. Since February, its central bank has required all exchanges to obtain a permit for trading cryptocurrencies and to register with the country’s Anti-Money Laundering Council. They are also subject to annual fees. We expect the rest of Asean-5 to follow, in response to concerns that Bitcoin is being used to fund terrorism and other crimes,” Entrepreneur’s report quoted Prinz Magtulis and Andi Haswidi, FT Confidential Research analysts.

The progress continues to materialize as the country is poised to allow 10 blockchain and virtual currency companies to do business in the specified economic zone. The participants will stand to benefit from tax perks and in return will offer employment opportunities.

“We are about to license 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans,” Reuters quoted Raul Lambino, chief of the Cagayan Economic Zone Authority (CEZA).

“They can go into cryptocurrency mining, initial coin offerings, or they can go into the exchange,” added Lambino.

The companies will serve as the first virtual currency firms to become operational in the country following the legalization of their entry into the economic zone. This is far removed from the steps taken by neighboring countries in the region. However, exchanging fiat money to virtual currency will need to take place offshore to avoid breaching Philippine regulations.

The CEZA, which is the state agency managing the Cagayan Special Economic Zone and Freeport in the north-eastern part of the country, has developed the rules to allow virtual currency companies to set up facilities and offices in the zone.

More Digital Solutions for the Philippines

Meanwhile, there continues to be a debate on the use of cryptocurrencies not only in Asia but also around the globe. For its part, the Philippine central bank has yet to endorse using cryptocurrency. Earlier, the organization has expressed its reservations on the technology, saying it can be misused.

While digitizing the currency has yet to be the top concern of the Philippine government, Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla has stated that the government is working on bringing digital solutions closer to people.

“What we’re trying to do at this point in time is to move people to more accessible digital solutions,” Espenilla said. He added that BSP, as a regulator, will be focusing on enabling competition and interoperability of innovations.

“As the population becomes more familiar with this world, then we can look into the possibility of digital currency,” he added.

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