The number of approved cryptocurrency exchanges has been
growing in the Philippines. In addition to 11 operators registered by
the central bank, the Bangko Sentral ng Pilipinas, there are 37 other
crypto exchange operators licensed by the government-owned Cagayan
Economic Zone Authority.
Also read: FATF Releases Global Standards for Crypto Assets
11 Crypto Exchanges Registered With Central Bank
The Bangko Sentral ng Pilipinas (BSP) has registered 11
cryptocurrency exchanges, allowing them to operate in the country,
according to the most recent list of Remittance and Transfer Companies
with Money Changing or Foreign Exchange Dealing and Virtual Currency
(VC) Exchange Service.
The licensees are Betur Inc. dba Coins.ph, Rebittance Inc.,
Bloomsolutions Inc., Virtual Currency Philippines Inc., Etranss
Remittance International Corp., Fyntegrate Inc., Zybi Tech Inc.,
Bexpress Inc., Coinville Phils Inc., Aba Global Philippines Inc., and
Bitan Moneytech Co. Ltd.
The central bank adopted a formal regulatory approach to
cryptocurrency through the issuance of Circular No. 944 dated Feb. 7,
2017. It requires businesses engaged in the exchange of cryptocurrencies
for fiat money in the Philippines to register with the central bank as
remittance and transfer companies. The bank elaborated:
BSP-registered VC exchanges are now required to put in
place adequate safeguards to address the risks associated with VCs such
as basic controls on anti-money laundering and terrorist financing,
technology risk management and consumer protection.
As for cryptocurrency ATMs, the central bank revealed on June 13 that
it had not authorized any individual or entity to install them in any
location in the Philippines or manage online platforms for them and
other crypto transactions. The notice reiterates that crypto ATM
operators must register with the central bank as VC exchanges under the
aforementioned circular. In addition, the BSP noted that a separate
approval may be required from the Securities and Exchange Commission for
the issuance of initial coin offerings and operation of crypto trading
platforms.
37 Others Licensed by CEZA
Besides the companies registered by the BSP, many others have been
licensed by the Cagayan Economic Zone Authority (CEZA) to operate crypto
exchanges. CEZA is a government-owned and controlled corporation tasked
to manage and supervise the development of the Cagayan Special Economic
Zone and Freeport, the 54,119-hectare area located at the northeastern
tip of the country.
“As a freeport, it operates as a separate customs territory similar
to Hong Kong, Singapore, Labuan in Malaysia and Hamburg in Germany,”
CEZA described, adding that it has been offering foreign companies
incentives and advantages to registering their businesses there. “These
developments are all deemed toward attracting legitimate and productive
local and foreign investments and, thus, creating employment
opportunities in and around the freeport,” its website details. CEZA
Administrator and CEO Raul L. Lambino explained:
We are making CEZA a sandbox for the development of these
disruptive technologies, serving as a laboratory for interested parties
to experiment on these new dimensions of business enterprise.
On June 17, CEZA revealed that 37 companies are currently licensed
under its “Financial Technology Solutions and Offshore Virtual Currency
Exchange (OVCE) Business Rules and Regulations of 2018.” There are two
types of licenses. Twenty-four companies have been granted the OVCE
Principal license and 13 companies the OVCE Regular license. The former
allows licensees to conduct offshore fintech business and crypto
exchange activities; the latter allows licensees to conduct only
offshore crypto exchange activities.
The 24 Principal licensees are Golden Millenial Quickpay, Ultra
Precise Investment, Liannet Technology, Rare Earth Asia Technologies,
Formosa Financial Holdings, Tanzer Holdings, Asia Premier International,
Orient Express Global, White Ranch, Dragon Empire Developments, Galaxy
Plus Developments, Tiger Wheel, Ipe Global, Cr8tiv Solutions Management,
Sino-Phil Economic Zone Agency Development and Management, Digifin
Technologies, Hong Kong Yuen Shing Hong, First Bullion Holdings, Okcoin
Philippines Technology, 6x Tech, Increz Korea, Harseq, Fafa Internet
Blockchain (China), and Wangwang Quickpay Foundation.
The 13 Regular licensees are Cezex Trading, Unicorn Venture
Investment, Eplata Pacific, A&C Fintech, Zipmex, Bird Mouse,
Ecoflow, Adax Tech, Monetium, Bitpoint Apec Investment, Hxl (HK)
Technology, Noah Ark Technologies, and Wtia.
Some companies have falsely claimed to have been licensed such as
Freedom Traders Club, Ploutos Innovation, Ploutos Coin, Hedger
Technology, Hedger Mining, Idragon Science Development, Teo Consulting
Group, ECP, and Grace Exchange, CEZA warned. The authority additionally
clarified:
No Filipino company, Filipino, or Philippine resident is
allowed to apply for a CEZA OVCE license, and if so licensed, such
licensee is not allowed to sell securities to Filipinos or to exchange
tokens into fiat currency, unless they are registered with the SEC or
the Bangko Sentral ng Pilipinas (BSP), respectively.
Philippines Building Crypto Valley of Asia
In collaboration with property developer Northern Star Gaming and Resorts, CEZA is building Crypto Valley of Asia for companies operating in the Cagayan Special Economic Zone and Freeport.
The first phase of the project consists of a 25-shop housing
development inside the cyberpark with services and amenities such as
co-working and living spaces, business incubation and acceleration hubs
as well as back offices of crypto exchanges and service providers, CEZA
outlined, adding:
Soon to also rise in crypto valley are a world-class
internet data center, crypto-mining firms, self-contained power
production facilities, and a state-of-the-art cyber security and risk
assessment facility.
BSP’s Regulatory Approach to Cryptocurrency
“The BSP recognizes that VC systems can revolutionize financial
services delivery, particularly for payments and remittances,” Governor
Nestor A. Espenilla Jr. acknowledged at the annual convention of the
Association of Philippine Correspondent Bank Officers in June last year.
Explaining the central bank’s views and regulatory approach to
cryptocurrency, the governor stated that “Cryptocurrencies are a medium
of exchange. The Bangko Sentral ng Pilipinas recognizes this,” noting:
We have adopted a regulatory approach to privately-issued
cryptocurrency that is balanced, open and flexible… This is to allow
the market to promote financial innovation and for the industry to take
advantage of all its benefits and efficiencies – with prudence.
He further remarked, “Cryptocurrencies, like fiat currencies, are
neither good nor bad. They are neutral … The BSP allows the market to
develop but it has also issued responsive regulations to uphold consumer
protection and to maintain financial stability.”
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