The Philippines is giving permission to ten companies operating in the cryptocurrency and blockchain space to set up offices in an economic zone to support employment while benefiting from tax relief measures, Reuters reports, citing a government official. These enterprises will become the first cryptocurrency entities to operate in the Philippines after local regulators passed an order to legalize such operations in an economic zone.
Raul Lambino, head of the Cagayan Economic Zone Authority (CEZA), told Reuters:
“We are about to license 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans […]. They can go into cryptocurrency mining, initial coin offerings, or they can go into exchange.”
However, when it comes to the exchange of fiat currency into digital money or vice versa, the transactions should be done offshore as Philippine regulations do not consider cryptocurrencies legal tender.
The CEZA is the government entity that runs the Cagayan Special Economic Zone and Freeport in the north-east of the Philippines. In February, it came up with regulations allowing cryptocurrency firms to establish offices and facilities in the region. According to the rules, companies should invest no less than $1 million over a period of two years and pay up to $100,000 in license fees.
According to Lambino, the CEZA is also thinking about establishing a blockchain and fintech university in the economic zone to train workers for the companies operating there.
The Philippine central bank, which is responsible for the regulation of crypto exchanges in the country, does not support the use of any digital currency, citing their vulnerability to misuse. At the beginning of the year, it issued a warning on the risks associated with investing in cryptocurrencies.