It was announced on Friday that the Bangko Sentral ng Pilipinas (BSP), the country's central bank, has approved accreditation for two cryptocurrency exchanges: Virtual Currency Philippines Inc. and ETranss. BSP's Deputy Governor of Bank Supervision, Chuchi Fonacier, said the bank will allow these platforms to convert pesos, the country's official currency, to cryptocurrencies such as bitcoin and Ether.
With the addition of these companies, there are now five regulated crypto exchanges in the Philippines. Other accredited markets include Rebittance Inc., Betur Inc. (aka Coins.ph), and BloomSolutions.
The BSP has seen the benefits of cryptocurrencies, such as quick and inexpensive payments. In fact, peso-to-cryptocurrency conversions have increased dramatically in recent years. The first quarter of 2018 averaged $36.74 million per month.
Additionally, Philippine digital wallet company Coins.ph demonstrated its popularity when it announced it had reached five million customers in May. The positive response to this and other crypto-based services by Filipinos is no doubt on the BSP's radar.
Despite the BSP's relatively welcoming attitude toward cryptocurrencies, the regulator remains circumspect due to concerns of volatility and cybersecurity.
The bank previously studied the possible need for crypto exchanges to register as electronic money issuers because they maintain customers' e-wallets. However, Fonacier ultimately said the BSP would most likely not proceed with this proposal, so that the regulator could maintain a simple registration process for new participants in the cryptospace.
The Philippines has experienced various crypto advancements in recent months. Most notably, the Cagayan Economic Zone Authority (CEZA) announced its intent to license 25 crypto exchanges in the Cagayan Special Economic Zone and Freeport, which is located in the northern part of the island country. Through the CEZA's rules, approved exchanges would be expected to invest a minimum of $1 million over two years as well as spend $100,000 in licensing fees.
In terms of the country's crypto regulation, the Securities and Exchange Commission of the Philippines released an advisory on April 10 detailing that crypto cloud mining contracts would be considered securities. A cloud mining contract allows an entity to purchase some of the tokens mined through equipment owned by another individual or group.
Moreover, a Philippine Senate bill submitted in February seeks to increase penalties relating to crypto crimes to "one degree higher than what is provided for" in the current law. The proposed legislation also calls for the confiscation of cryptocurrencies involved in the commission of crimes and the adjustment of overall penalties so that they consider the peso-to-cryptocurrency exchange rate when the crime occurred.
The addition of crypto exchanges and efforts to regulate the space demonstrate the country's interest in furthering crypto's presence in the Philippines.