The Philippines is becoming one of the top countries in the world that offers a good location to build blockchain and cryptocurrency projects. According to Mr. Brock Pierce, a blockchain advocate and cryptocurrency pioneer, the country is a great place to grow blockchain because it is an English speaking country, has a big room to grow, and a huge unbanked population.
Additionally, the country’s regulators are open to adoption of blockchain and cryptocurrencies. Currently, the Bangko Sentral ng Pilipinas (BSP) – the country’s Central Bank, and the Securities and Exchange Commission (SEC) are working towards regulating cryptocurrencies to protect the Filipino people. This is a positive step towards adoption as this move will give users security and confidence in dealing with it.
Purchasing bitcoin and other virtual currencies in the country is now made easier through available cryptocurrency wallets such as Coins.ph. There are also other options such as buying it through a BTC ATM or even over the counter. However, these options have a set price per token. What if you want to set your own price for the coin you want to buy or sell? This is where open book cryptocurrency exchanges come in.
As of this update (September 13, 2018), there are three available trading platforms that are based in the country.
What is Cryptocurrency
Table of Contents
- 1 What is Cryptocurrency
- 2 Properties of Cryptocurrency
- 3 State of Cryptocurrencies in the Philippines
- 4 How to Buy, Sell, and Trade Crypto
- 5 What is a Cryptocurrency Exchange
- 6 Philippine Cryptocurrency Exchange
- 7 Overall
Virtual currencies, depending on which definition you accept almost always mean similar to cryptocurrencies. Think of it as a Philippine Peso but not tangible (meaning you can’t hold it physically) and is only digital and without a central bank that regulates it.
The first widely-known cryptocurrency is bitcoin that was introduced in 2009 by an unknown programmer/s Satoshi Nakamoto. He announced that he was able to create a “peer-to-peer electronic cash system, a new electronic cash system that uses a peer-to-peer network to prevent double-spending.”
Bitcoin runs on a decentralized network, a public ledger, where every single transaction is recorded on a number of nodes. Who record these transactions? Miners. They do it by solving strong cryptography puzzles that are needed to confirm and record a transaction. After confirming it, it will then be sent to a network of nodes and add it to its database. Once it is confirmed and recorded, the transaction is now unforgeable and irreversible, unless specific conditions are fulfilled.
With the creation of bitcoin, a long list of cryptos soon followed. Ethereum’s token, ether, is the second cryptocurrency in terms of market capitalization. If bitcoin is gold, ether is silver (Although in the past, the “silver” is often associated with litecoin because both bitcoin and litecoin have the same use case.
Read more: What is Cryptocurrency?
Properties of Cryptocurrency
There are three properties of cryptocurrency. These properties set it apart from the usual fiat currency. In order to further understand the token, you also need to know its properties.
- Revolutionary Property – A revolutionary invention. A digital currency that runs on a decentralized peer-to-peer network. Secured by strong cryptography and math, and not by people or trust.
- Transactional Property – Cryptocurrency transactions are unique. It is immutable and cannot be changed unless certain conditions are fulfilled.
- Permissionless – You don’t need to ask permission from anybody to use cryptocurrency, mine, or even download necessary programs to run a node. It doesn’t need a permission from central banks or governments.
- Anonymous – The only thing you will need in order to trade crypto to another is a public key or an address. It is either from a QR code or a string of random numbers and letters. It is impossible to connect real-world identities to the addresses*.
- Fast and Global – You can transfer bitcoin or any crypto to anybody in the world in just a couple of minutes without the need of using a bank or other means. It runs on a network of computers and wouldn’t matter if you will transfer crypto to your neighbor or to the other parts of the world.
- Secure – Cryptocurrency funds are locked using a strong cryptography system. Even though a user’s public key is out in the open, it can only be unlocked with his private key.
- Irreversible – Every transaction is irreversible. If you send it to the wrong address, there is no stopping it. There is no safety net and no one can reverse the transfer for you.
- Monetary Property – Cryptocurrencies also has monetary properties. Although, it is different than your usual fiat.
- No Debt – Unlike the numbers in your bank account that represents debts and a record of IOUs, cryptocurrencies are money and is as real as gold but only digital.
- Controlled Supply – Cryptocurrencies such as bitcoin has a limited supply. It has a maximum of 21 million tokens. This is also the same to many other cryptocurrencies but the max number varies. Since bitcoin is likened to gold, it has a limited and finite supply.
State of Cryptocurrencies in the Philippines
The state of cryptocurrencies in the Philippines is looking bright. The two major regulators that are keeping its eyes open and focused on this new technology are the Bangko Sentral ng Pilipinas (BSP) and Securities and Exchange Commission (SEC).
The BSP released its first advisory on virtual currencies in 2014. It informed the public about its features and risks in dealing with cryptocurrencies. After three years, on February 6, 2017, the regulator then released a circular concerning virtual currency exchanges that are more favorable towards crypto. This circular is called BSP Circular 944 where licensed companies are allowed to legally exchange fiat to cryptocurrency and vice versa.
The SEC, on the other hand, is also busy giving out advisories to the public about entities that use bitcoin and other cryptocurrencies for investment schemes (Click here for a list of SEC Advisories). Aside from giving advisories, as of this update (September 13, 2018), the SEC is developing its draft rules on virtual currency exchanges. It noted that the Virtual Currency Exchange (VCE) license that the BSP is giving does not include acting as a trading platform but is more on crypto to fiat transactions. It is also finalizing its rules on ICOs (initial coin offerings).
How to Buy, Sell, and Trade Crypto
In the Philippines, it is easy to buy bitcoin, sell, or trade. You can download an application like Coins.ph, Bitbit.cash, or Abra go to the nearest pawnshop or a 7-Eleven convenience store and top up. This is usually the most common way to buy BTC. There are also other ways to get cryptocurrency such as via bitcoin ATM, prepaid bitcoin, or even over the counter.
You can also buy, sell, and trade using a cryptocurrency trading platform. Usually, these exchanges use bitcoin as the primary trading pair. But Coins.ph’s Coins.pro (previously known as CX) have a direct PHP trading pair such as BCHPHP, ETHPHP, etc
What is a Cryptocurrency Exchange
Cryptocurrency exchange is a trading platform where users can buy, sell, and trade cryptocurrencies. An online platform where users can exchange cryptocurrencies to another cryptocurrency or fiat. These exchanges charge a fee for each transaction.
Types of Cryptocurrency Exchange:
- Traditional Cryptocurrency Exchanges – A platform where buyers and sellers trade cryptocurrencies based on the current market price. It usually charges a fee after each transaction.
- An example of this is GDAX and Kraken.
- Cryptocurrency Brokers – These are like your average money changers. You exchange your crypto to another crypto or to fiat. The price is set by the brokers.
- An example of this is Shapeshift and Changelly.
- Direct Trading Platforms – These are peer-to-peer trading between buyers and sellers. Unlike the traditional crypto exchanges, it doesn’t have a platform but instead does a direct exchange or over the counter exchange. Buyers and sellers can set their own price. If you’re going to use this kind of platform, make sure to check the current market price of the crypto before making a trade.
- An example of this is LocalBitcoins.
- Cryptocurrency Funds – These are pools of funds that are professionally managed cryptocurrency assets.
Philippine Cryptocurrency Exchange
Basing on the type of cryptocurrency exchanges mentioned above, the Philippines has the traditional cryptocurrency exchange. As of this update (September 13, 2018), there are already three crypto trading platforms in the country. One is open to the public with Coins.ph account, while the other two are on private beta.
In order to operate a cryptocurrency trading platform in the country, one has to receive an E-Money Issuer License and a Virtual Currency Exchange License both from the BSP. If the company also wishes to do an Initial Coin Offering (ICO), it also needs to get a license from the SEC. Another Virtual Currency Exchange License coming from SEC is also on its way.
First on the list is Coins.ph’s Coins Pro, it was initially called CX. It is available to Coins.ph users and not yet open to interested users who don’t have a Coins.ph account.
Using your Coins.ph account, you can transfer PHP from the app to Coins.pro. In order to transfer funds from your Coins.ph wallet to your Coins.pro account, you have to go to Coins.ph’s Pay Bills then scroll down up to Exchange. Choose whether to send your PHP, BTC, ETH, BCH, or XRP. Put the amount you’re comfortable with and proceed.
Coins.pro also allows users to trade fiat to bitcoin cash, ripple, litecoin (soon), and ethereum. Because it is connected to Coins.ph, users can easily fund their Coins.pro accounts via 7-eleven, GCash, and partner banks.
Official Website: https://pro.coins.asia/
The Philippine Digital Asset Exchange (PDAX) recently received its VCE license from the BSP on September 2018.
PDAX will let Filipinos trade cryptocurrencies and digital assets without the need for going to foreign exchanges. It is also reported that the exchange will utilize the same order-matching technology used in stock exchanges to match buyers and sellers.
PDAX users can trade pesos for bitcoin, bitcoin cash, ethereum, ripple, and litecoin. 2 more coins are set to be announced soon. PDAX also listed 7-eleven, GCASH, the SM Store, and partner banks as ways to fund user accounts.
Official Website: https://pdax.ph/
Citadax is a cryptocurrency exchange platform by SCI Ventures, the company behind buybitcoin.ph, bitbit.cash, and rebit.ph. Not much is known about Citadax at the moment, but its website currently allows users to join the waitlist.
Official Website: https://citadax.com/
Note: This list doesn’t include cryptocurrency exchanges that will operate in the Cagayan Economic Zone Authority (CEZA). CEZA-based cryptocurrency exchange will service users outside the Philippines.
Having cryptocurrency exchanges based in the country will let Filipinos trade their Philippine fiat to cryptocurrency without the need of going to a foreign crypto exchange. This will save the Filipino users money in terms of fees as they no longer need to trade their fiat to BTC and then make a trade.
With the rate SEC and BSP are going with their regulations, they are giving the Filipino users more confidence and security in doing cryptocurrency trades. These regulations not only gives security but it helps spread awareness while promoting innovation.
- List of Licensed Offshore Cryptocurrency Exchanges from the Philippines CEZA
- List of Blockchain Events in the Philippines
- You just bought some coins? Here’s where to store them safely.
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- Invest in bitcoins (or in any altcoins) only the amount you can afford to lose!
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- Before investing in any cryptocurrency, check the people behind it, its mission, and other details to ensure that they are worth investing for. Don’t invest in something you don’t know.
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