It would not be an exaggeration to state that blockchain technology is changing the very face of financial operations across the world. Cryptocurrency is currently the hot, new girl in town that everyone wants to take out for a date. Asia is leading the line, and the Philippines, in particular, has gone all out to get red roses and chocolates to woo the digital asset.
In simple terms, the two are a match made in heaven. The Southeast Asian country is at the forefront of rapid economic growth that drives the region. What makes this story even more interesting is the banking demographic of the country: 7 out of 10 people do not have a bank account. In other words, nearly 70% of the population keep cash away from established financial institutions.
This is a situation ripe for cryptocurrency.
It can finally provide a financial, and more importantly, legitimate platform for people to buy, trade, and sell, minimising the need to use cold currency. Crypto also provides an opportunity for common citizens to invest their hard currency and reap whatever benefits are on offer.
But there is much more to the Philippines story than just banking demographics.
According to the Bangko Setral ng Pilipinas, “…the BSP aims to regulate VCs when used for delivery of financial services, particularly, for payments and remittances, which have a material impact on anti-money laundering (AML) and combating the financing of terrorism (CFT), consumer protection and financial stability.”
When the central bank of the country has legitimised cryptocurrency, you know that the digital asset is only going one way… Up.
It was not always a bed of roses between the two. The volatile nature of cryptocurrency had kept many financial officers on their toes. As early as the beginning of this year, there was talk on enforcing a slew of regulations that would cap the unlimited freedom that the virtual currency enjoys. Part of the reason was the increased use of crypto by terror outfits such as ISIS.
Rather than go nuclear on the digital asset, the Philippines adopted a more measured, rational approach, “BSP-registered VC exchanges are now required to put in place adequate safeguards to address the risks associated with VCs such as basic controls on anti-money laundering and terrorist financing, technology risk management and consumer protection.”
At last count, there were 11 registered exchange operators validated by the central bank. In addition to these operators, 37 more licensees have been given the go-ahead to operate in the special economic zone of the Philippines.
In terms of recent regulations, there are some key statuettes:
These are indeed interesting times: for cryptocurrency and for the country. The digital asset is poised to revolutionise everyday transactions in the Philippines. And all the winds are blowing in the right direction; in terms of government approval, economic factors, and financial regulations.
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