Local media has reported that the Philippines’ central bank, the Bangko Sentral ng Pilipinas (BSP), has approved the registration of two virtual currency exchanges. The announcement comes after the BSP introduced legislation designed to recognize and regulate virtual currency exchanges earlier this year.
The BSP Governor Has Announced the Registration of Two Companies Seeking to Operate Virtual Currency Exchanges
The Bangko Sentral ng Pilipinas has announced the successful registration of two companies seeking to operate bitcoin exchanges in the Philipines. The announcements were made by BSP Governor, Nestor Espenilla Jr., during the recent Fintech Thought Leadership Roundtable Series. Espenilla has described the prospective virtual currency exchanges as “locally based but having international roots.”
The BSP developed guidelines for the operation of virtual currency exchanges earlier this year, seeking to create a regulatory apparatus that would foster innovation whilst managing associated money laundering and terrorist financing risks. Concerns pertaining to bitcoin’s potential use as a vehicle for terrorist financing are acute for the Philippine government due to security concerns emanating from Islamic terror cells associated with Jemaah Islamiyah.
The Philippine Virtual Currency Exchanges Will Operate Under Similar Guidelines as Remittance and Money Exchange Businesses
The Philippine virtual currency exchanges will operate under the Anti-Money Laundering Act of 2001, and bitcoin exchanges will largely operate under similar guidelines as remittance and money exchange businesses. Espenilla described bitcoin as enjoying significant recent growth in the Philippines, stating that trading volume has almost tripled in 12 months, with monthly trading volume currently approximated at $6m USD compared to only $2m USD last year. The BSP governor stressed “the importance” of bringing bitcoin trading “under the regulatory framework” of the state, noting that although bitcoin “comes from a small base” the BSP has “seen a rapid increase” in use.
The BSP has expressed its belief that virtual currencies hold the potential to revolutionize the payments and financial services industry, and suggested that it may move toward fostering further financial inclusion with regards to the virtual currency industries in future.
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