While many Filipinos are trying to invest in cryptocurrency, the Bangko Sentral ng Pilipinas (BSP) is urging the public to exercise “extreme caution” in dealing with bitcoin and other virtual currencies.
BSP posted a new media advisory on cryptocurrencies’ inherent volatility, along with its benefits and dangers as they noticed its popularity with retail investors.
“While virtual currencies were not initially designed to be used as an investment product, some people speculate on them, which adds to the price volatility.” – Bangko Sentral ng Pilipinas
Bitcoin was at its all-time high during December 2017 when it climbed nearly $20,000 a piece. As of this writing, bitcoin’s price is around $6,000 to $7,000, noticeably lower than its price in 2017’s end. This is a huge loss to people who bought it at its peak.
The BSP also pointed the need for learning and understanding the nature of cryptocurrencies before speculating or investing. This also goes with other types of investment.
“The public is advised not to blindly follow the crowd, adopt herd mentality or engage in speculative transactions.” – Bangko Sentral ng Pilipinas
BSP Governor Mr. Nestor Espenilla Jr. sees virtual currencies as a way to ease remittances and wire transfers. As one of the countries that receive a high level of remittance from abroad, virtual currencies can make transactions faster and cheaper. It also allows users to purchase goods online. These are just some of the benefits of virtual currencies to the public. However, it can also be a tool for illegal transactions. The BSP also warned that it is not insured, so the holder stands to lose everything if the value of the virtual currency he holds goes down.
- Read more: How Bitcoin is Easing Remittances in Asia
The BSP has released memorandum circular no. 944 last year which serves as a guideline for virtual currencies. The regulator reiterates that it is not endorsing cryptocurrencies.