Benjamin Diokno, who is the governor of the central bank of the Philippines, warned users against the potential use of cryptos for terrorism financing, underscoring that the BSP or Bangko Sentral ng Pilipinas is going to continue to keep an eye on their use in the country carefully. The news was published on the 10th of June this year.
Additionally to the remarks and warnings of Diokno, the deputy governor of the BSP, named Diwa Guinigundo, provided some further insights into the stance of the institution toward cryptos during the launch of the unnamed book about Bitcoin or BTC.
The governor of BSP criticizing the potential of BTC
The governor of the central bank ostensibly criticized the possibility of BTC to function as the unit of account, store of value, as well as medium of exchange, claiming that the top volatility of the crypto inhabits its usefulness on all of the three points.
Diokno even recognized that blockchain, as well as specific implementations of distributed ledger technologies of DLTs, may actually be useful for the settlements and payments for the peer-to-peer transactions, presenting this as the potential risk to the traditional banking sector.
He actually said that game theory dictates possible dysfunction when there is a breakdown of the market when everyone distrusts each other. According to him, there can’t be a total disregard for a central bank or a third party which provides lender of last resort facility.
The values of crypto transactions almost doubled since 2018
The deputy governor Guinigundo also said that the central bank is going to approach fintech development with the use of regulatory sandboxes so that to balance the prospective benefits of the innovative financial technologies with some robust investor and consumer protection.
According to one report, which provides current data from the Technology Risk and Innovation Supervision Department of BSP, the value of the crypto transactions almost doubled during the last year – it hit $390.37 million in comparison with $189.18 million during 2017.
The breakdown of the data also indicates that conversion from fiat currencies into cryptos accounted for about $208.27 million, the crypto-fiat conversion for $173.33, as well as the crypto-enabled international incoming remittances for about $8.77 million.
BSP requiring domestic crypto exchanges
During February of 2019, the Philippines actually introduced the new set of rules which govern the issuance, as well as the acquisition of utility, and also security tokens.
BSP also required domestic cryptocurrency exchanges to register as the remittance, and transfer companies, and to implement specific safeguards – covering CFT, AML, consumer protection, and risk management – since February 2017.
Earlier in June, BitMEX Ventures has also invested in a crypto exchange which was officially licensed by BSP, and during April, the payment services firm Bitspark has revealed its plans to release crypto pegged to the national fiat currency of the Philippines, the peso.