The recent spiked interest in cryptocurrency has seen the traditional financial institutions shaking as they are faced with uncertainty. Many people don’t know when the bubble will burst, but they are trying as much as possible to address the issue before it becomes too big to handle.
The Philippine Central Bank, the Bangko Sentral ng Pilipinas (BSP) together with the country’s regulators are planning to create some regulations for cryptocurrencies. The BSP Deputy Governor, Chuchi Fonacier, said that the bank had been working with the Securities Exchange Commission. The two entities have been trying to put up some regulations for the businesses in the country to be able to deal with cryptocurrencies. Fonacier said that the bank had been working to regulate ICOs and digital exchange licensure but now they were trying to find a way to regulate Bitcoin too. In an interview with reporters, Fonacier explained that they had been currently working on regulation guidelines for exchanges, but with time they could also branch into Bitcoin.
In her interview, Fonacier also noted that the regulation would take place only with the SEC. The bank could not initiate the regulations alone but would have to be in collaboration with someone, in this case being the SEC. The new regulations guidelines indicate that only virtual currencies which will convert to flat currency would be regulated.
The bank is responding to the rise in exchange of Bitcoin to the national currencies in the Philippines. Millions of dollars worth of Bitcoin have been traded and converted to national currencies recently in the Philippines. The BSP had been working on reviews of the cryptocurrency exchange applications and Bitcoin. They had been trying to get them licensed in the country. As of now, 12 companies were known to have applied for regulatory approval, and five more were said to have been added to the list of applicants. The BSP is also said to have approved two trading platforms, Coins.ph and Rebittance.
Nestor Espenilla, the BSP Governor also talked about the regulation of ICOs and the legalization of Bitcoin as a security back in November. Espenilla explained at the time that the BSP had an open mind when it came to fin-tech advancement. Espenilla added that this meant that they took an active role when it came to the providing opportunities for innovation in the financial technology industry in the country.
Based on the latest regulatory guidelines, the bank will only regulate businesses that will be changing their virtual currencies to USD or any other alternative government-issued currency.