Two New Cryptocurrency Exchanges Accredited in Philippines; Total Grows to Five

The central bank of the Philippines, Bangko Sentral ng Pilipinas (BSP), has accredited two new cryptocurrency exchanges, according to a report this Friday, citing a senior official's statement.

The central bank of the Philippines, Bangko Sentral ng Pilipinas (BSP), has accredited two new cryptocurrency exchanges, Business World reported on Friday, citing a senior official’s statement.

BSP Deputy Governor Chuchi G. Fonacier told the news outlet that applications filed by Virtual Currency Philippines and ETranss have been approved, allowing the two platforms to convert Philippine pesos into virtual currencies like Bitcoin (BTC) and Ethereum (ETH). The two exchanges join previously accredited peers Rebittance, Betur (also known as Coins.ph) and BloomSolutions.

Friendly but cautious stance

The Philippines is gradually growing into a crypto-friendly region. Last year, BSP officially recognized Bitcoin as a legitimate payment method. In February, the Cagayan Economic Zone Authority (CEZA) — the government entity that runs the Cagayan Special Economic Zone and Freeport in the north-east of the Philippines — came up with regulations allowing cryptocurrency firms to establish offices and facilities in the region.

According to the rules, companies should invest a minimum of $1 million over a period of two years and pay up to $100,000 in license fees.

In April, the CEZA said it will give permission to 10 companies operating in the cryptocurrency and blockchain space to set up offices in the Cagayan Economic Zone.

Notably, the Philippines’ Securities and Exchange Commission (SEC) said late last year that it was considering legalizing the use of digital currencies in the country by classifying them as securities. However, this plan has not yet seen any developments.

The Philippine authorities had also previously considered whether the new exchanges should register as e-money issuers because they offer wallet services.

Fonacier, in her statement on Friday, mentioned that “internal consultations showed that it may not be advisable, in a bid to keep the registration process simple for these new players.”

“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,” Fonacier explained.

Despite the generally friendly stance on cryptocurrencies, the Philippine government remains cautious of the potential risks of crypto volatility, criminal involvement and cybersecurity.

The country’s Anti-Money Laundering Council will reportedly begin closely observing digital currency transactions as part of their broader effort to crack down on dirty money. Firms will be obliged to report covered transactions as well as any suspicious transactions.

Crypto transactions on the rise

Crypto transactions have been on the rise in the Philippines. Last month,

Fonacier revealed that conversion from digital currencies to the local currency averaged $36.74 million each month in the first quarter of this year, citing data from Rebittance and Betur.

The figure dropped from the $38.27 million monthly average in the last quarter of 2017 when Bitcoin prices neared $20,000.

Still, the amount represents a sharp rise from the estimated average monthly cryptocurrency transactions to around $8.8 million from January to June last year, and is expected to increase with more exchanges operating in the country.