The Philippines’ Securities and Exchange Commission has released draft rules on Digital Asset Exchanges, set to become the guidelines for any person or company operating cryptocurrency exchanges in the country. The Commission encourages the public to submit comments and position papers regarding the draft rules so that it can be improved to better serve the public and every party involved.
Below is the position paper submitted by Carlos Tapang, founder of Rockstable.io. Anyone interested to have their positions and comments regarding the draft rules known to the public can send it to BitPinas. The views and opinions expressed in this article are that of the contributor and do not necessarily reflect that of this website.
Rock Stable Token Inc is a U.S.-based startup registered in Wyoming that is introducing a stablecoin called ROKS on the Ethereum blockchain. We guarantee redeemability of ROKS at 1.00 USD, plus or minus 1%. Our goto market strategy will benefit OFWs by way of much cheaper remittances to their families in the Philippines, by sending ROKS instead of USD or PHP.
In reading the Proposed Rules, I see that the definition of the term “Convertible Digital Asset” (definition K, page 2) applies to ROKS specifically. However, this term is never used anywhere else in the Proposed Rules, which then begs the question: which rules should apply to us as the source and administrator of ROKS?
Another comment is about Section 51, page 22: No digital asset may be listed in a Digital Asset Exchange without the Digital Asset Exchange securing the review of the Commission to such listing, among others.
I understand that the intent here is to protect the exchange user or trader, but I believe that this will do more harm than good. My first concern is that the SEC will have to establish another set of rules prescribing the process by which the approval of a Digital Asset for listing shall be approved. This cannot be arbitrary, as I think you realize, because even though the current regulators in SEC may be trustworthy, who knows about the next batch of regulators and beyond? In other words, this gives too much micro-management power to the SEC regulators on a decision that is best left to the regulated exchange itself.
It is in the interest of exchanges to only list Digital Assets that will become popular in time. Besides, the exchanges, being now regulated entities for which specific rules apply, are open to litigation should they list a Digital Asset that is a scam.
I therefore propose the following wording for Section 51: The exchanges can decide which Digital Asset to list, but this prerogative carries with it the responsibility of ensuring that no Digital Asset so listed would turn out to be a scam.
Such rule makes it clear that exchanges are open to the risk of litigation and fines if they are not careful, and yet allows for more innovation and competition. It acknowledges that the regulators themselves cannot pre-determine which Digital Assets will be successful and therefore beneficial to society, and which ones will turn out to be scams.
Carlos C. Tapang
Founder and CEO
Rock Stable Token Inc
This article is first published on BitPinas: Position Paper on SEC’s Draft Rules on Digital Asset Exchanges by Rockstable.io