Among the increasing cryptocurrency adoption within the Philippines, the country’s central bank needs measures to higher safeguard investors through elevating local crypto awareness.
The Philippine central bank, Bangko Sentral ng Pilipinas (BSP), really wants to promote crypto education because the authority sees lots of benefits connected with crypto and blockchain, a BSP representative stated within an interview with Cointelegraph.
“The BSP’s focus is on virtual assets’ ability to enhance the delivery of monetary services, particularly payments and remittances services, because it has possibility to provide faster and economical change in funds, for both domestic and worldwide setting,” the BSP mentioned.
Based on the BSP, crypto adoption within the Philippines has elevated in the last couple of years because of the COVID-19 pandemic. As a result, Bitcoin (BTC) buying and selling volumes within the Philippines were hitting new highs on some peer-to-peer crypto exchanges in This summer 2021.
“During the pandemic, we view the readiness of shoppers look around the virtual realm, particularly online platforms that advertise to provide earnings-generating possibilities or play-to-earn applications,” the BSP spokesperson stated.
As a result of the growing adoption, the Philippine central bank doesn’t intend to adopt any significant limits on crypto investments or buying and selling at this time. Rather, the BSP is searching to apply a regulatory approach targeted at supplying an “enabling environment” through “risk-based and proportionate rules,” the central bank’s representative stated, adding:
“The BSP continuously enhance and expand our financial consumer awareness campaigns particularly made to educate relevant stakeholders on virtual assets, both regarding advantages and also the risks involved.”
Despite targeting an “enabling environment” for crypto, the BSP holds a very negative stance on making use of crypto like a payment method. “Virtual assets, particularly cryptocurrencies, whose values are derived in line with the agreement from the community of users, aren’t intrinsically made to function as legal tender,” the financial institution noted.
Based on the BSP, cryptocurrencies cannot function as a way of payment because of risks like high volatility along with a high possibility of illegal use or thievery because of elevated anonymity and “weak cyber and digital identity security protocols.” Among other risks, the financial institution pointed out crypto transaction irreversibility, meaning no central authority would ever have the ability to cancel a Bitcoin transaction or restore such funds.
The BSP also noticed that the regulator views cryptocurrencies virtual assets as opposed to a currency. “Since the cost on most virtual assets is driven by speculation, virtual assets expose users to cost volatility and chance of losses,” the BSP noted. To deal with this, the central bank issued guidelines for virtual asset providers included in Circular No. 1108 in The month of january 2021.
Related: The Philippines halts virtual asset provider license applications
The BSP still sees great possibilities in utilizing blockchain technology to boost the safety and efficiency of monetary services within the Philippines. The central bank is presently going through the issuance of the central bank digital currency (CBDC).
The BSP is intending to undertake Project CBDCPh, an airplane pilot project that will inter-institutional fund transfers employing a wholesale CBDC platform. Based on the bank, a retail CBDC isn’t highly relevant for that country soon.
