Philippines’ Bangko Sentral ng Pilipinas (BSP) is getting a number of applications showing interest in creating cryptocurrency exchanges in the country. Though the Central Bank is yet to decide on it, deputy governor, Chuchi Fonacier, indicated that the banking regulator is assessing the applications. Incidentally, the regulator issued public advice not to follow the crowd blindly and engage in speculative transactions in the digital currency market. The move comes at a time when the digital currencies are struggling to hold its prices amidst clampdown by different governments around the world.
Processing At Different Stages
Currently, Bangko Sentral ng Pilipinas disclosed that at least 29 applications were pending before it. These applications were in different stages of processing. This included ongoing assessment, pending submissions of required documents apart from business model presentation. The latest news might look somewhat strange to the other parts of the world since some of the countries like China and India want to have their own cryptocurrency and dump the privately mined one.
However, the central bank seems to be going with the available volume of data. Bangko Sentral ng Pilipinas’ latest data indicated that the volume in respect of bitcoin transactions averaged approximately $8.8 million a month in the Philippines during the first six-month period of the last year. This was significantly higher than the $2 million a month averaged in the whole of the year 2015, according to philstar. This is one of the reasons that are driving the companies to approach creating a cryptocurrency exchange in the country.
As the central bank saw rapid growth in the digital currencies use in the country for both remittances and payments, the regulator felt the need to have a formal framework for the sector. This resulted in a fresh circular on February 6 last year. The circular invited cryptocurrency exchanges for registration with Bangko Sentral ng Pilipinas for treating them as remittance and transfer firms.
These exchanges were also advised to create or establish proper safeguards to reduce the risk associated with digital currencies. Most of the controlling measures were focused on terror financing and anti-money laundering apart from consumer protection mechanisms and technology risk management systems. In September and October last year, the banking regulator approved Betur Inc and Rebittance Inc registration respectively.
No Newly Registered Exchanges
Since then, no applicants were provided with registration with the central bank. Fonacier disclosed that this was due to lack of completion of submitting required documents. The regulator has also been coming up with either caution or advice or fresh regulations constantly to regulate the market. Its January 2017 circular advised operators about reporting obligations of dealing with the virtual currencies.
One of the BSP’s recent advice stated that “Because of price volatility, virtual currency holders may incur significant losses when trading or investing in virtual currencies. While virtual currencies were not initially designed to be used as an investment product, some traders speculate on virtual currencies which adds to the price volatility”. This suggested that the regulator is also well aware of what is happening in the cryptocurrency market and wanted market force to determine its direction.