Cryptocurrency exchanges are growing in the Philippines every day, despite the decline in the value of virtual currencies last year due to growing population demand and leniency among regulators.
Authorities of a developing country in Southeast Asia allowed at least a cryptocurrency exchange of 29 after three that the central bank announced this week, according to domestic media reports.
This number, which is high for Asia, follows a total exchange of 10 authorized by the central bank. Authorities of the Kagayan economic zone in the far north of the archipelago issued additional permits 19, according to the zone’s site in October.
According to Jonathan Ravelas, Banco de Oro UniBank's chief market strategist at Metro Manila, these exchanges are contributing to the development of the fast-growing financial sector, or fintech sector, in the Philippines.
“Fin tech seems to be very advanced in the area of bitcoin trading philippines,” he said. Consumers, he said, "ultimately pay attention to the mobility of their use in mobile wallets, [which] gives them the flexibility to use money."
According to Ravelas, local people usually choose more traditional investments, such as stocks, but young companies are looking for cryptocurrencies to attract capital, this process is called the initial coin offer. Seven of 10 local people do not have a bank account, he added, so virtual currency gives these consumers a new opportunity to make payments.
This population will be able to use a currency source that is open to everyone and transparent due to the online transaction registration book called blockchain.
Analysts believe that the head of the central bank may consider cryptocurrency trading as part of his larger plan to develop electronic payment systems in the country.
Cryptocurrency “probably goes to these efforts to simplify electronic payments. I think this is the key,” said Christian de Guzmán, vice president and senior credit director of Moody's Sovereign Risk Group in Singapore.
The National Payment Systems Act 2016, among other things, “strengthens the central bank’s ability to increase the efficiency of payment systems as cash channels in the financial market,” said Benjamin Diokno, head of the department, in his speech last month.
The Central Bank and the Securities and Exchange Commission are “working to regulate cryptocurrencies to protect local people,” the Bitpinas domestic Bitcoin and blockchain news website said in November. “This is a positive step towards adoption, as this step will provide users with security and confidence in their decision.”
The Philippines, although later than most of East Asia, is mastering work with cryptocurrency, will ultimately stand out if regulators accept, rather than limit it.
China and South Korea have set limits on certain types of cryptocurrencies. Both banned initial coin offerings in 2017, and China ordered cryptocurrency exchanges to be closed as part of this move. There are at least 21 exchanges in South Korea.
Japan is widely regarded as the most liberal cryptocurrency spot in Asia. This country, which allowed exchanges 17 to fully register, overtook China in 2017 as the largest bitcoin market in the world with 58 percent of the global volume. Japan declared Bitcoin to be a legal tender in 2017.
The Philippines, in their current development, must take benefit of the “pioneer advantage,” said Kenneth Ameduri, financial analyst and general manager of the crypto-specialized news site Crush the Street in the United States.
“I think the Philippines understands that it will be very difficult to get involved in cryptocurrency, because it will happen no matter what, and if they relate to this capital best, capital will flow there” and other jurisdictions will simply be completely missed. ” - said Ameduri.
According to de Guzmán, the Philippines may eventually see the role of bitcoin cash in falsifying tax payments and paying for illegal drugs. Taxation and drugs are sticky issues without cryptography.
Trading platform Maxitrade is very popular among local population.
Maxi trade is an innovative cryptocurrency broker. It provides modern traders and investors with a platform for work that meets all quality criteria, enables users to sell bitcoin and to buy it.
Cryptocurrency broker Maxitrade was founded by the international financial holding Maxi Services.
Maxi Services has existed since 2008. For more than 10 years, the company has been creating the list of convenient and technological services for working in global financial markets, with crypto currencies bitcoin btc, cash and credit cards.
Due to frequent changes in the exchange rate and the process of selling, the cryptocurrency market quickly turned into a field for traders.
The mission of Maxitrade cryptocurrency broker is to become a reliable and modern crypto broker that will be available to everyone. The company has developed a functional, intuitive trading platform, which has already become a loyal assistant for beginners and experienced traders, as well as:
• Simplified the conditions for the input and output of cryptocurrency;
• zeroed the monthly fee and commission for operations;
• Gathered a team of competent and energetic traders who have become round-the-clock technical support for our clients;
• Ensured the uninterrupted operation of servers and the maximum degree of data protection to date with the help of 27 talented technicians of the company.
This trading platform is especially popular with local youth.
The largest bank in the Philippines, Union Bank, led by Aboitiz, has launched its stablecoin pegged to the Philippine peso. UnionBank was the first financial institution in the country to conduct blockchain transactions. This is reported by the local edition of The Philippine Star.
According to Arvi de Vera, Vice President of Union Bank, to date, most transactions have been successfully completed. Institutions make the purchase, buy back and internal transfers of cryptocurrency. Everything goes without a hitch.
The local stablecoin has many functions, namely:
• Local variety of cryptocurrency;
• Stable storage of value;
• Means of exchange;
• Programmable token with self-executing logic.
According to google, Since stablecoin is intended for widespread use, in the future it can appear on various platforms / wallets and can be used all over the world. But to date, the token is available only to local customers.
The Philippine government continues to actively work to ensure that the cryptocurrency market finally appears inside the state. In this case, the northeastern province of Kagayan will give an official positive answer to ten blockchain companies, as well as Bitcoin exchanges, as follows: they will be able to work there, as this will be a separate economic zone for btc and ethereum. In this case, we are talking about tax preferences (this is especially important for companies that have just begun their activities), as well as new jobs.
Where does the information come from? This statement was made by the head of the economic zone Kagayan Raul Lambino. The official stressed that the 10 companies that will begin working in the Philippines will be the first representatives of the cryptocurrency industry as a whole. They will officially receive the right to conduct their activities within the state. Other companies will learn from them. We remind you that the government of the Philippines still decided in February that the cryptocurrency bank accounts should work in a special economic zone.
“Very soon, we will issue licenses to several cryptocurrency platforms at once. It will be about 10 exchanges. Of these, some companies from Hong Kong, Japan, Korea and Malaysia will begin to work. All these objects can conduct any activity: mining, conducting various ICOs or working as platforms for trading cryptocurrency. "
It is worth noting that the Philippines put a rather serious restriction on cryptocurrency exchanges: the exchange of virtual (cryptocurrencies) digital coins for fiat money (and vice versa) can be made only outside the state.
An additional feature for the work of exchanges: during the 2 years of its operation in the Philippines, cryptocurrency exchanges are required to invest at least $ 1 million in their activities. In addition, each exchange is required to acquire a license card for $ 100,000 for the same period.
We remind you that the Central Bank of the Philippines was against the fact that cryptocurrency even existed on the domestic market. The government constantly said that the main thing is complete protection of the consumer from financial loss for long terms. Already in 2017, the Philippines reviewed all the activities of the cryptocurrency market and began issuing licenses to crypto currency exchanges.
According to a number of publications, the Department of Justice of the Philippines has commissioned an investigation into a cryptocurrency company that allegedly used the name of Senate head Aquilino Pimentel III to attract customers.
According to the Department, the Philippine Global Coin cryptocurrency company allegedly illegally used the name of the Coco Pimentel politician.
The head of the Senate denies belonging to this company. “There are no agreements between me and the Philippine Global Coin or the Senate and the company ... I was shocked by their bold statements of agreement,” the politician said and emailed in his social networks.
At the same time, Pimentel gave the Philippine citizens the following recommendations:
• be extremely careful with any statements about cryptocurrency;
• always check information loaded from official sources;
• do not trust dubious exchanges and accounts;
• Do not risk large sums without experience.
The Department emphasized that if substantial evidence is found during the investigation, charges will be brought against the company.
“The regulatory framework governing the issuance and registration of cryptocurrencies is expected to be adopted this year,” said Emilio Aquino, an official with the Philippines Securities and Exchange Commission, responsible for enforcing laws and protecting investors.
“We need to act, because the initial offer of coins (ICO) is of great interest especially in 2017. We want to adopt appropriate legislation that will protect investors in this new space, ”Mr. Aquino said at a press conference.
The ICO rulebook will include recommendations on the cybersecurity of cryptocurrency markets, eligibility of issuers, including officials and technology used, as well as financial literacy of investors.
The country's authorities have not yet approved any public sale of cryptocurrency and are knocking unlicensed sellers.
“Unfortunately, there have been many cases where ICO promoters have disappeared to nowhere without even sending any feedback. We do not want this to happen with us, ”said the representative of the Securities Commission.
The Philippines, looking at neighboring Japan, plans to legalize Bitcoin in the near future. The head of the securities committee believes that cryptocurrency deserves to become a security in the country and should be registered.
The crypto community is confident that the registration process inhibits innovative implementations. Legalization of digital coins is in any case needed more than a ban. The Securities Market Control Commission plans to closely monitor the development of the cryptocurrency market.
The head of the commission said: “Bitcoin appears in ICO media advertising, which means that the new currency must be recognized as a security.” The locals could read his words in the main newspapers of the country.
Currently, the cryptocurrency turnover in the Philippines is regulated by the example of similar processes in the USA, Malaysia and Hong Kong. The head of the National Bank of the country said he was ready for new financial technologies. The financial institution is ready for the decision of the authorities on the legalization of cryptocurrency.
Several crypto exchanges have already been created and are successfully operating for many days in the state, about 10 more have been submitted to the government for consideration. At the beginning of 2018, the country's main bank published documents regulating the operation of digital currency exchanges and providing anti-money laundering.
The authorities plan to provide protection for all transfers and other events in the new currency. The population is increasingly making transfers to relatives in other countries in digital money. Also, citizens of the country were allowed to exchange Bitcoins and litecoins for the national currency of Peso.
The Philippines plans to allow the business of a dozen blockchains and cryptocurrency companies in the special state-controlled economic zone Cagayan Economic Zone Authority (CEZA), located an hour's flight from Hong Kong, China and Taiwan, reports Reuters.
The government of the republic plans to attract cryptocurrency companies to the economic zone with the help of tax incentives - to create jobs in the region, explained CEZA head Raul Lambino in an interview with Reuters.
Moreover, Raul Lambino also confirmed that the government will issue licenses to cryptocurrency firms for carrying out activities in the free economic zone, that is, it will legalize their cryptocurrency activities and business contacts. Companies will be allowed to create cryptocurrency exchanges, launch initial coin offerings (ICOs) and cryptocurrency mining.
“We intend to provide licenses to 10 platforms for cryptocurrency exchange. From Japan, Hong Kong, Malaysia, Korea ... They will be able to engage in cryptocurrency mining, initial placement of coins (btc or ltc), or they will be able to exchange, ”the representative of the special economic place added.
However, there is one nuance: any exchange of cryptocurrencies with fiat should occur outside the Philippine borders, in order to avoid violating the laws of the country.
To help create jobs, the regulator of the economic zone is also considering the possibility of creating a new technological university specializing in blockchain technology within the framework of a special economic zone, Lambino added.
A friendly step towards the crypto market follows the adoption in February of special rules of the CEZA economic zone, which will allow crypto firms to legally open an office or production in this territory. To obtain a license, companies must invest at least $ 1 million over two years and pay $ 100,000 to obtain a license.
Meanwhile, in the main territory of the country, the Central Bank of the Philippines, starting in December, has been considering applications from a dozen companies that would like to carry out activities related to cryptocurrencies in the country. At the moment, it is not clear whether the cryptocurrency services operators that submitted the application will move to a specially allocated economic zone.
The Philippines became one of the very first countries that decided on the state regulation of cryptocurrency exchanges: in October 2017, a representative of the country's central bank in an interview on local television announced “innovative regulatory measures”, saying also that bitcoin, as a money market tool, “is fast, works almost real-time, and convenient. "
The special economic zone will issue 25 principal licenses for trading platforms and other crypto apps. Each recipient of the document will be allowed to issue four ordinary licenses.
A principal license will cost 360 thousand dollars. Each ordinary license costs 85 thousand dollars. Other differences between the two types of licenses are not mentioned. Thus, the authorities plan to profit in the amount of 3.6 billion pesos or 67 million dollars.
Licensees will be required to deduct 0.1 percent from each transaction within their platform. In addition, companies must:
• invest locally at least a million dollars over two years;
• open an office in the Philippines;
• actively participate in the activities of this office;
• stimulate an easy increase in demand for local cryptocurrency.
Thus, the country has long let the world know about its friendly attitude towards cryptocurrencies.
The Deputy Head of the Central Bank of the Philippines emphasized the benefits of using cryptocurrencies, for the first time since the publication of regulatory guidelines for the industry.
Then, in a statement, a representative of the central bank noted that he “recognizes that virtual currency systems can revolutionize the provision of financial services, in particular in the field of payments and money transfers, in view of their ability to provide faster and more efficient transfer of funds, both within domestic and international payments. In addition, cryptocurrencies can help expand access to financial services. ”
The move to regulate cryptocurrencies in the Philippines was the first such initiative in Asian countries. An important factor that led to the emergence of regulatory regulation was the rapid growth of cryptocurrency transactions in the country. BSP deputy director Melchor Plabasan said the Philippines makes $ 6 million worth of cryptocurrency transactions every month, compared to $ 2 million a few years ago. He defined the recently published regulations as “innovative regulation,” which was one of the first in the world.
In his interview for a local TV channel, Plabasan stated:
Cryptocurrencies are no different from any other monetary and investment instrument. There are risks, but in essence, they can be managed. If you need something fast and convenient, working almost in real time, then it makes sense to use cryptocurrencies like bitcoin. ”
When asked if Bitcoin could soon be seen as a ubiquitous “tool for savings and investments,” the deputy director of the central bank voiced concerns about the volatility of bitcoin prices, and noted that “we see it more as a payment and transfer tool,” not as an investment asset. ”
The comments of the representatives of the Central Bank of the Philippines are distinguished by an open, even encouraging position regarding cryptocurrencies, which contrasts sharply with the opinions of other similar institutions. For example, Jens Wiedmann, president of the German Central Bank, recently warned that digital currencies (for example, ripple) could “aggravate” financial crises in the future.
The Philippines Central Bank recognized the useful potential of cryptocurrencies for their ability to provide fast and cheap transactions. However, the regulator remains cautious about the potential risks that cryptocurrencies carry. Such risks include high volatility, the use of digital currencies in illegal activities and cybersecurity.
Previously, BSP considered the need for new exchanges to register as issuers of digital currencies, as they offered their customers an electronic wallet for storing cryptocurrencies. However, after internal consultations, the bank decided to abandon this kind of regulation.
It is also reported that the Philippines Anti-Money Laundering Council will strengthen measures to track operations, buying and selling of digital currencies. Thus, all companies operating in the country will be required to disclose information about any suspicious transactions.
In recent years, the popularity of cryptocurrencies in the Philippines is constantly growing. So, for example, in the last month, about $ 36 million in local currency was converted into digital currencies, according to information from two accredited crypto exchanges.