Philippine Central Bank and Government Support for Crypto Growth

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The Philippines is one of Southeast Asia that has significantly grown crypto asset users. According to the Central Bank of the Philippines, Bangko Sentral ng Pilipinas (after this, we write BSP), crypto adoption in the Philippines has increased over the past few years due to the COVID-19 pandemic. This makes the Philippine government and central bank pay great attention to crypto asset trading.

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BSP still sees excellent opportunities in leveraging blockchain technology to improve the security and efficiency of financial services in the Philippines. The central bank is also exploring issuing a central bank digital currency (CBDC).

Quoting from Cointelegraph, the first step taken by BSP to successfully issue a central bank digital currency (CBDC) was to promote crypto education to protect investors. The hope is that investors have better awareness and educate stakeholders regarding the benefits and risks of virtual assets.

BSP wants to take a regulatory approach to create a “supportive environment” through risk-based and proportionate regulation.

However, although BSP targets a supportive environment for crypto, BSP has a firm stance in responding to using crypto as a payment method. The reason is that apart from its high volatility, the fluctuations in the value of cryptocurrencies are decided based on the agreement of the user community and are not intrinsically designed to function as legal tender.

Cryptocurrencies are also considered to have a high potential for unlawful use or theft due to increased anonymity, and “weak cyber and digital identity security protocols are also other reasons. Among those risks, the bank mentions crypto transactions being irreversible, which means that no central authority can cancel Bitcoin transactions or return the funds.

Quoted from Bitcoin.com, Felipe Medalla, Governor of BSP, also gave his opinion on cryptocurrencies. He said that he didn’t want to ban cryptocurrencies. But he doesn’t want to call it cryptocurrency. Because according to him, cryptocurrencies are rarely used for actual payments, especially when the price is very volatile. He suggested calling it a “crypto asset.”

He also talked about the use of electricity by the miners, which is considered quite large and is terrible for the environment.

Medella emphasized: “Our policy is that crypto consumers should not use it to avoid anti-money laundering and know your customer’s rules.”

He concluded that for exchanges, “where you exchange crypto assets for bank deposits or physical currency,” it is central bank policy to enforce “all necessary rules to prevent money laundering, especially to finance crime.”

Based on the statement and actions of the respected government and the Central Bank of the Philippines, Bangko Sentral ng Pilipinas (BSP), and Felipe Medalla, the Governor of the Central Bank of the Philippines (BSP) who supports and does not want crypto assets to be banned, the Philippines have an excellent potential for growing crypto adoption in the Philippines. Of course, with regulations that have been regularly designed for investor safety.

This made SeaDEX aiming for the Philippines for the first regional expansion after Indonesia. And finally a few days ago, it was launched publicly.

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