The pressure on cryptocurrencies is growing rapidly in the Philippines. TFollowing a recent series of controversial moves by state regulators and local think tanks, the country’s central bank issued a warning to citizens, advising them against conducting any trades with unregistered or foreign cryptocurrency exchanges.. The announcement itself doesn’t sound threatening, but taken in the context of accompanying events, it makes a nation of 112 million people an uneasy region for cryptocurrencies.
On August 17, the Bangko Sentral ng Pilipinas (BSP)
a note of warning to citizens of the country, “strongly urging” them not to deal with virtual asset service providers (VASPs) that are not registered or domiciled abroad.
The Bank emphasized that any business with virtual assets is a high-risk activity in itself, and with foreign platforms there is an additional challenge in applying legal recourse and consumer protection. This leaves the public with 19 registered VASPs to carry out their operations.
The list will hardly be expanded, at least for the next three years, because a BSP memorandum halted the issuance of new VASP licenses from September 1. This is how the BSP understands the delicate balance of promoting innovation in finance and managing risk.
Perhaps the most intriguing part of the topic concerns one of the world’s largest cryptocurrency exchanges, Binance, which is trying to obtain the national license and, in case the BSP memo is taken seriously, has less than two weeks to do it.
In a recent interview with Cointelegraph, Binance Asia-Pacific head Leon Foong said that they have already submitted the relevant paperwork to acquire the licenses, but cannot provide any other details as it may be confidential. The problem is that the Philippine Securities and Exchange Commission (SEC) has already warned the public not to invest in Binance, echoing the views of a think tank at Infrawatch PH, which had previously pushed for the exchange to be suspended for alleged illegal promotions.
At the same time, The Philippines does not consider itself particularly strict or protectionist in its relationship with the cryptocurrency industry. As the BSP stated in its written statement to Cointelegraph on Aug. 15, it sees “many benefits associated with crypto and blockchain.” He is eager to promote a crypto education. Notably, the BSP revealed its intention to avoid “any significant limits on cryptocurrency investments or trading at this time.” The regulator aims for “risk-based and proportionate regulations”.
Even so, the country remains a hypothetically attractive destination for cryptocurrencies. It is considered one of the fastest growing economies in the world, and more than 11.6 million Filipinos own digital assets, making the nation 10th globally in terms of adoption.
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