Bitcoin in the Philippines
- “If you want something that is fast, near real-time and convenient, then there’s the benefit of using virtual currencies like bitcoin,” the central bank official added.
The Government of the Philippines has been taking a bullish stance on bitcoin as they have made many movements to embrace and foster the use of the currency.
Earlier this year Bankgko Sentral ng Pilipinas,BSP, started to officially regulate local bitcoin exchanges. As they have seen that people are active in the virtual currency space and enterprises ((Coins.ph, BuyBitcoin.ph and Rebit.ph) have popped up to meet the filipino consumer’s appetite for the virtual currencies.
The country of the Philippines possesses some of Asia’s most advanced and holistic BTC platforms which allows Filipino users to settle any currency related bills, payments and transfers with bitcoin.
In response, BSP, is regulating the Philippine Bitcoin Exchanges as remittance companies and they are recognizing BTC as legal and proper payment method.
Earlier this year, BSP Deputy Governor Nestor Espenilla announced the plans of the Philippine Central Bank to issue an in depth regulatory framework for Bitcoin users, exchanges and companies. The Deputy Governor emphasized the rapid growth of Bitcoin within the country, making of the monthly Bitcoin volumes increases from $1 mln to $6 mln a month over the span of a year.
Guidelines for Virtual Currency (VC) Exchanges
The government quickly followed up on their promise to provide regulatory guidance on Bitcoin and the Central Bank of the Philippines released BSP Circular No.944 entitled “Guidelines for Virtual Currency (VC) Exchanges”.
The document clarified the nature of bitcoin, and stated that it won’t be classified a s legal currency because it wasn’t issued by the central bank. But since they saw numerous benefits to using the currency in terms of payment and remittance, the central bank will allow for the flows of the currency with moderate regulation of the bitcoin providers, classifying them as remittance companies.
They then formalized the BTC facilitators and made certain that the companies would be in compliance with Anti- Money Launder (AML) and Know Your Customer (KYC) policies.
Now, the regulators are seeking to provide further clarity on the expanded use cases of bitcoin and its network. In a press conference this week, the country’s equivalents of a Securities and Exchange Commission (SEC) leader Emilio Aquino presented their stance and future plans on expansion.
They are looking at whether or not they should be adopting the virtual currencies as securities which would officially take them to another level in regards to regulatory acceptance. When the move occurs, cryptocurrencies would be integrated in the regulatory code.
The commissioner (Aquino) stated
“The direction is for us to consider this so-called virtual currencies offerings as possible securities in which case we will apply the Securities Regulation Code. The heightened frenzy and increasing popularity surrounding initial coin offerings has pushed authorities to lay down new rules to protect consumers.
We have seen particularly in the social media sites that there are offers of initial coin offerings, most popular of which, of course [are] bitcoin and Ethereum…but [there are] new ones which may be considered as securities.”
Their bank and their regulators have said that they are taking an open minded approach while studying what other regulators in the US, Malaysia and other countries are doing.
The Use Case
The primary and approved use cases are for the increasing need for improved remittance services from Filipinos working overseas. The government has endorsed at least six companies in the space and are looking to approve more companies who will be providing these services.
The reason why the people of the Philippines are preferring this to traditional services like Western Union and others is because the transactions are cost effective and less time consuming.
Some governments are seeing the interest from their people and taking a market based approach to how they deal with Bitcoin. The primary thought process is , if there is significant demand, then regulate moderately and let the space progress.