Manila, PHILIPPINES – Crypto activity is heating up in the already hot city of Manila as two more cryptocurrency exchanges have been approved and accredited by the Philippines central bank, the Bangko Sentral ng Pilipinas (BSP). According to BSP deputy governor Chuchi Fonacier, the regulator had approved applications for Virtual Currency Philippines and ETranss as platforms to convert pesos (the local currency) into Bitcoin and Ethereum. With the two new exchanges, the total number of cryptocurrency onramps in the Philippines has increased to five, including Rebittance, Betur (better known as Coins.ph) as well as BloomSolutions. The Philippines represents a huge potential market for cryptocurrencies, in particular fiat to cryptocurrency transactions, with over 10 percent of the nation’s GDP coming from overseas remittances, the potential for cryptocurrencies to reduce the slippage due to remittance costs is massive. Currently, money transfers and remittances for the Philippines’ large unbanked migrant workers can cost as much as 10 percent.
The BSP has recognized the benefits of using electronic currencies in terms of faster and cheaper remittances, but concerns over the volatility in the value of cryptocurrencies as well as its potential use for crime have held the central bank back. But with the demand for conversions from pesos to cryptocurrencies showing no signs of abating, with US$36.7 million changing hands in the first quarter of this year, the actual demand for cryptocurrencies has risen, with the price of major cryptocurrencies such as Bitcoin and Ethereum now at about a third of their value when compared to the last quarter of 2017, with about US$38.3 million worth of pesos pouring into cryptocurrencies, according to a report by BusinessWorld.
Given that Filipinos’ appetite for the digital dollars shows no signs of abating, the Anti-Money Laundering Council has said that they will start examining cryptocurrency transactions as part of a measure to tighten oversight on potential money laundering, with cryptocurrency exchanges required to report suspicious transactions. But in a move that will likely be welcome by cryptocurrency exchanges, Fonacier added that the BSP will hold back on the earlier proposal requiring them to secure separate licenses to operate as electronic money issuer, in an effort to keep the registration process simple in the Philippines’ nascent cryptocurrency industry. According to Fonacier,
“Now, we are refining the rules. If your business model has a portion making use of e-wallet, then there’s an additional requirement but not necessarily or automatically an e-money license.”
But holding an e-money license will impose additional burdens on cryptocurrency exchanges, with a minimum capital of US$187,000 and a load limit of US$1,870. The approach by the Philippines central bank is a more measured and arguably enlightened one, as it seeks to embrace cryptocurrencies which will not only benefit the country, but the Filipino people as well.