By Shiela Bertillo
The Bangko Sentral ng Pilipinas (BSP) recognizes that restrictions brought by the pandemic continues to be the catalyst of digitalization in the country as the transactions in virtual currency in the Philippines jumped by 71 percent to P105.93 billion in the first half from P62.12 billion in the same period last year.
Specifically, the central bank said that cryptocurrency transactions alone went up to 362% year on year as per BusinessWorld. E-money transactions, on the other hand, rose by 62% year on year.
BSP Governor Benjamin Diokno said during his weekly online press conference that the number of transactions from January to June reached 19.88 million, which is 4.6 times more than the 4.31 million recorded in the first half of last year.
The first half of 2021 already exceeded the P101.61 billion worth of transactions last year which was almost five times more than the P20.94 billion logged in 2019.
However, despite the hike, Diokno reminded the public to transact only through BSP-registered virtual asset service providers (VASPs) to guarantee that appropriate consumer protection and redress mechanisms are in place as per PhilStar.
“Deal only with registered virtual asset service providers. Be reminded that virtual assets are not considered legal tender and not insured by the Philippine Deposit Insurance Corp. (PDIC),” Diokno stated.
Further, BSP reiterated that users of virtual assets should have a good understanding of how these work and carefully consider risk factors such as price volatility and cybersecurity concerns.
Diokno noted that the value of virtual assets is highly speculative in nature and may easily be influenced by word of mouth.
The regulator emphasized and warned the public that virtual assets are also prone to cybertheft, fraud, and hacking, among other cybersecurity risks.
“Thus, virtual assets users should observe basic ‘cyber hygiene’ practices and understand their rights as consumers,” Diokno said.
The BSP governor mentioned that there are currently 64 licensed electronic money issuers (EMIs), of which 35 are non-bank EMIs. And, as of end-September, there are 15 VASPs registered with the central bank. These VASPs and EMIs are mandated to comply with regulations or standards that foster operational soundness and ensure provision of quality services.
On the other hand, last August, the BSP has clarified that Axie Infinity, a popular play-to-earn non fungible token (NFT) game widely played in the Philippines, is not a VASPs.However, the central bank is considering its possibility to be an operator of payment system (OPS) due to the increase of merchants accepting smooth love potion (SLP), one of the game’s token with fiat value, as mode of payment. (Read more: BSP Closely Monitors Local Axie Infinity SLP Merchants System)
Last month, according to BSP Governor Diokno, the review for Axie Infinity’s possible status as on OPS is still ongoing as well as the terms for the use of NFTs and the monitoring of the other online gaming platforms. (Read more: BSP: Axie Infinity’s OPS Status Still Under Review)
Another OPS candidate, LYKA, a popular social platform that allows its users to purchase, exchange, and use Gift cards in Electronic Mode or GEMs as payment for goods and services, to suspend payment operations and was invited to register with the BSP as prescribed under Republic Act 11127 or the National Payment Systems Act (NPSA) last July. (Read more: BSP Orders Lyka to Stop Operating, Invites Registration)
In October, LYKA announced that it will apply for an OPS license but the BSP is still yet to receive their requirements up to this date. (Read more: BSP Welcomes LYKA’s Plan to Register as OPS)
This article is published on BitPinas: BSP: Virtual Currency Transactions Reach Php 106 Billion in First Half of 2021