Philippines’ Central Bank Will Continue to Closely Monitor Crypto, Citing Terror Financing

Published at: June 11, 2019

The governor of the Philippines’ central bank, Benjamin Diokno, has warned against the potential use of cryptocurrencies for terrorism financing and underscored that the Bangko Sentral ng Pilipinas (BSP) will continue to closely monitor their use in the country. The news was reported by local English language newspaper The Philippine Star on June 10.

In addition to Diokno’s remarks, BSP Deputy Governor Diwa Guinigundo reportedly provided further insights into the institution’s stance toward cryptocurrencies during the launch of an unnamed book about bitcoin (BTC).

Diokno ostensibly criticized bitcoin’s potential to function as a unit of account, medium of exchange and store of value, claiming that the top cryptocurrency’s volatility inhibits its usefulness on all three points.

The governor reportedly recognized that blockchain and certain implementations of distributed ledger technologies can be useful for payments and settlements for peer-to-peer transactions, presenting this as a potential risk to the traditional banking sector:

“Game theory dictates possible dysfunction when there is market breakdown, when everyone may distrust one another. There cannot be a total disregard for a central bank or a third party that provides lender of last resort facility.”

Guinigundo said the central bank would approach fintech development using regulatory sandboxes in order to balance the prospective benefits of innovative financial technologies with robust consumer and investor protection.

The Philippine Star cites fresh data from BSP’s Technology Risk and Innovation Supervision Department, which has reportedly revealed that the value of cryptocurrency transactions almost doubled in 2018 — hitting $390.37 million as compared with $189.18 million in 2017.

The data breakdown indicated that conversion from fiat currencies into cryptocurrencies accounted for $208.27 million, crypto-fiat conversion for  $173.33 million, and crypto-enabled international incoming remittances for $8.77 million.

In February of this year, the Philippines introduced a new set of rules governing the issuance and acquisition of utility and security tokens.

BSP has required domestic crypto exchanges to register as remittance and transfer companies and implement specific safeguards — covering AML, CFT, risk management and consumer protection — since February 2017.

Earlier this month, BitMEX Ventures invested in a crypto exchange officially licensed by BSP, and in April, payment services firm Bitspark revealed plans to release a cryptocurrency pegged to the Philippines’ national fiat currency, the peso.

Tags
Bitcoin Regulation
Cryptocurrencies
Central Bank
Philippines
Related Posts
Russia: Central Bank Suggests Limiting Sale of Crypto Assets for ‘Unqualified Investors’
The Central Bank of Russia wants to set an annual limit for so-called “unqualified investors” that want to purchase digital assets, local business media giant RBC reported on Tuesday, March 12. According to the documents obtained by RBC, the bank wants to amend the current draft crypto bill, dubbed “On Digital Financial Assets,” which recently passed a second of three readings in Russia’s parliament, the State Duma. The central bank’s paper recommends equating investor limits to the ones set in a draft bill on crowdfunding, which is also being reviewed by the Russian parliament. The head of the State Duma’s …
Bitcoin Regulation / March 12, 2019
Iran: Central Bank Will Consider Expert Input Before Enacting Crypto Regulations
Iran’s central bank said it would consider opinions from the cryptocurrency sphere prior to finalizing new draft regulations, according to a statement today, Jan. 29. The same day, the Central Bank of Iran reportedly uploaded plans for its approach to cryptocurrency regulation on its official website. The bank said it plans to discuss the rules at the ongoing Electronic Banking and Payment Systems Conference in Tehran, which began today. A report from local news outlet Al Jazeera today noted that lawmakers would seek to ban aspects of cryptocurrency. Specifically, the move would block the use of crypto for payments inside …
Bitcoin Regulation / Jan. 29, 2019
India: Central Bank Report States Crypto Does Not Threaten Financial Stability
The Reserve Bank of India (RBI) has stated that cryptocurrencies currently pose no threat to financial stability in its recent financial report, published Dec. 28. The document entitled “Report on Trend and Progress of Banking in India 2017-18” reads: “[C]rypto-assets do not pose risks to global financial stability currently. The market continues to evolve rapidly, however, and this initial assessment could change if crypto-assets were to become more widely used or interconnected with the core of the regulated financial system. RBI quoted a conclusion drawn from a recent report by the Financial Stability Board (FSB) — an international agency consisting …
Bitcoin Regulation / Jan. 4, 2019
Zimbabwe’s Central Bank Bans Financial Institutions From All Crypto Dealings
Zimbabwe’s central bank has recently banned dometic financial institutions from dealing with cryptocurrencies, local media outlet NewsDay reports today, May 12. According to the report, the Reserve Bank of Zimbabwe’s (RBZ) director and registrar of banking institutions Norman Mataruka issued a circular Friday ordering all financial institutions to terminate servicing cryptocurrency exchanges within 60 days and begin to liquidate existing crypto-related accounts. Financial institutions have been ordered to “ensure that they do not use, trade, hold and/or transact in any way in virtual currencies,” a move which applies to both businesses and individuals. Explaining the decision, Mataruka highlighted the interconnectedness …
Bitcoin Regulation / May 12, 2018
Bitcoin bulls remain in charge even in the face of increasing regulatory FUD
Bitcoin (BTC) price broke above $25,000 on Feb. 21, accruing a 53% year-to-date gain at the time, it made sense to expect the rally to continue after U.S. retail sales data from the previous week vastly surpassed the market consensus. This fuelled investors' hope for a soft landing and the possible aversion of a recession in the U.S. economy. The apex of the U.S. Federal Reserve’s strategy success would be increasing interest rates and scaling back its $9 trillion balance sheet reduction without significatively damaging the economy. If that miracle happens, the outcome would benefit risk assets, including stocks, commodities …
Bitcoin / Feb. 27, 2023