A man walks past an electronic board showing exchange rates of various cryptocurrencies including Bitcoin (top left) at a cryptocurrencies exchange in Seoul, South Korea on Wednesday. (Reuters photo)
MANILA: The Philippine central bank is evaluating 12 applications for the registration of virtual currency (VC) exchanges after it issued permits to two firms earlier this year, but says it is not endorsing cryptocurrencies, including bitcoin.
The use of bitcoin for remitting money to the Philippines, one of the world’s biggest recipients of cash sent home by its citizens working abroad, has risen dramatically, prompting the central bank to issue guidelines for VC exchanges.
A VC exchange is an entity that facilitates the conversion or exchange of fiat currency to virtual currency, or vice versa.
The Bangko Sentral ng Pilipinas (BSP) is seeking to regulate the industry, which it says is open to misuse.
“We do not endorse virtual currency as a currency because it is not a currency,” Melchor Plabasan, deputy director and head of the BSP’s Core Information Technology Specialist Group, told a news conference.
“We only regulate bitcoin or virtual currencies when it is used in delivering financial services like remittance and payments,” he said, reiterating a warning that such currencies can be used in money laundering and terrorist financing.
Monthly transactions in the Philippines involving mostly bitcoin averaged $8.8 million in the first half of 2017, from only $2 million in 2015 and about $6 million in 2016, data from the central bank showed.
The central bank and a legislator have also cautioned Filipinos against investing in bitcoin in the absence of regulatory protections for them.
Bitcoin’s value has jumped more than 16-fold this year to above $17,000.
The BSP issued early this year a circular setting out guidelines for VC exchanges, having issued licences to two firms, Rebittance Inc and Betur, which provide remittance services.
These exchanges, which are locally-incorporated but majority-owned by foreign investors, are now required to comply with the BSP’s regulations covering remittance firms, including reporting transactions on a regular basis, Plabasan said.
Plabasan also said the BSP was preparing to issue a public advisory on “how they can protect their bitcoin wallet.”
“There are a lot of pyramid schemes right now disguised as ICOs (initial coin offerings) for investment channels,” he said.
“We will advise the general public to be wary of these types of institutions…and they should only deal with those that are registered with the BSP, ” he said.
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