What does the Bangko Sentral say about cryptocurrencies like Bitcoin?

CryptoCurrency 101 is a crash course, about the basics of Bitcoin for the average Juan and Juanita.

Bitcoin has swept the world with its ability to be traded, seemingly with a click of a button, with any person anywhere in the world. In fact, it has put many countries on notice.

Countries like Japan and Estonia have welcomed Bitcoin with open arms, for example. Japan in particular has embraced cryptocurrencies, and is rapidly adopting cryptocurrency in their ATMs, and as payment options using coins like MonaCoin.

Countries like Estonia, Russia and recently Venezuela have adopted their own respective cryptocurrencies to pace themselves with the changing times.

Other countries, like China and Korea have banned certain aspects of cryptocurrency (most notably ICOs). Vietnam and Iceland have banned cryptocurrency almost completely.

How about the Philippines?

Recently, the SEC has expressed its plan to regulate them, but how about the BSP?

As early as 2014, the Bangko Sentral has issued a warning advisory about virtual currencies like Bitcoin. In the advisory, the BSP said that it would “be closely monitoring developments on these virtual currencies particularly on their possible use for money laundering and other illegal purposes”. They explicitly stated at the time there were no regulatory measures on “Virtual Currencies” whatsoever.

By January 2017, the BSP released Circular No. 944 s. of 2017, which talked about guidelines for Virtual Currency Exchanges. While the BSP certainly welcomed cryptocurrencies like Bitcoin as it recognizes 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. These benefits, however, should be considered along with the corresponding risks in VCs considering the higher degree of anonymity involved, the velocity of transactions, volatility of prices and global accessibility. In particular, VCs pose ML and TF risks, information technology risks, and consumer protection and financial stability concerns, among others.

In fact, the BSP Circular wanted to treat Bitcoin currency exchanges similar with how they treat remittance and money changing centers, primarily to conduct checks, particuarly against terrorism financing and money laundering.

So far, only two bitcoin exchange operators were approved in the country and possibly more on the way, with entities like Salarium planning to penetrate the cryptocurrency exchange market.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla even said that the central bank is in talks with the Securities and Exchange Commission with making rules for Initial Coin Offerings or ICO oversight.

While the Philippines is positive about cryptocurrencies in general, our slow internet speeds and lack of network infrastructure might be a serious factor in implementing proper Initial Coin Offerings on a global scale (that aren’t scams of course).

The BSP’s support on the matter will certainly help move the country forward, so hopefully we can take full advantage of the cryptocurrency revolution.

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An avid cypto supporter, law school student, Certified Public Accountant, and a professional HODLer