The Philippines is still young regarding utilizing cryptocurrency as a mode of payment in exchange online for goods and services. While the whole world is enjoying its convenient use, our country, especially our government and investors, felt apprehensive about engaging such innovative ways of storing money in a blockchain. With the current pace of global industrial development, cryptocurrency is becoming a global phenomenon as several countries now recognize its importance. Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. It is a variety of virtual currencies that uses cryptography for security and is neither issued nor guaranteed by a Central Bank nor backed by any commodity. And we all know that the most common type of cryptocurrency is the Bitcoin.

Banking demography of the Philippines.

Filipinos are not known for having a bank account, and the BSP(Banko Sentral ng Pilipinas/Central Bank of the Philippines) reported that in 2016, only 35.6 percent of the Filipinos have a formal bank accounts. It's an indication that the majority of Filipinos are not exerting their effort on investing, and saving money. Therefore, the BSP are targeting to double it in the year 2023; thus they are eyeing the use of decentralized technology of currency to give its citizens another option in investing their money.

Risky ventures.

The volatile nature of the cryptocurrency is what makes the majority of Filipinos keeping their money away from it; they're afraid that they will have a negative return of profits instead of earning some. Actually, in as early as 2014, the government have already reminded it's citizen about the risk of cryptocurrency by issuing a Warning Advisory for the public that exchanges of virtual currency, such as the Bitcoin, are not regulated by the BSP or any other regulatory authority, and thus, there are no regulations that would specifically protect consumers and businesses for financial losses from transacting with the use of virtual currencies.

But on February 6, 2017, the BSP realized that the Virtual Currency (VC) system can revolutionize the delivery of financial services, the BSP issued Circular 944, or the Guidelines for Virtual Currency Exchanges, requiring VC exchanges to obtain certificate of registration to operate as "Remittance and Transfer Company". As such, all VC Exchanges shall adhere to the guidelines issued by the BSP. However, the BSP emphasized that this issuance is not to endorse VCs as currencies but merely to regulate the use of VCs in financial or business transactions. Thus, the BSP still reminds the public to be cautious in entering into VC transactions as it is a risky investment.

The said action of regulating crypto exchanges platform is said to have a positive outcome as many crypto exchanges launched their platform in the country. In the present, BSP has so far approved 16 crypto exchange service providers in total. The following are currently operating legally in the Philippines;

• Finchain Technology Inc.,

• Iremit Inc.,

• Moneybees Forex Corp.,

• Wibs PHP Inc.,

• Aba Global Philippines (Coexstar),

• Atomtrans Tech,

• Betur (dba Coins.ph),

• Bexpress,

• Bloomsolutions (Bloomx),

• Coinville Phils,

• Etranss Remittance International,

• Fyntegrate (dba Philippine Digital Asset Exchange or PDAX),

• Rebittance (Rebit, Buybitcoin.ph),

• Telcoin,

• VHCEX,

• and Zybi Tech (dba Juancash).

The Philippines' government want to tax and monitor cryptocurrency.

Despite recognition from the BSP and SEC(Security Exchange Commission), the Philippines still don't want to be complacent about it. There are still many sticky issues and concerns that they want to deal with; such issues are the money laundering and terrorist funding movement.

The BIR(Bureau of Internal Revenue) hasn't provide guidelines on how to tax cryptocurrency yet, because the government had yet to stabilize its laws about it. This will be a good news because it would supplement the government's revenue; on the other hand, this dramatically affect the transactions as it might be reflected on every transaction fee.

Progression.

The government, in participation of the Union Bank and PDAX, will launch an app for the distribution of government-issued bonds. This might also pave the way on the current studies conducted by the BSP on launching our country's own cryptocurrency in which will be named as the Central Bank Digital Currency or CBDC. They will try to look its feasibility and potential policy implication on our country.

The government, despite the risks it possess, believed that cryptocurrency will make a positive impact on our economy, especially in finance sector. With the right regulations imposed, the government is set to protects its consumer with the aim of an ambitious risk-free investing.

Thank you for reading.

Lead image source: https://enterph.com/blog/cryptocurrency-in-the-philippines-outlook-for-foreign-investors/