For First Metro Investment Corp. (FMIC) President Rabboni Francis Arjonillo, the BSP must address cryptocurrency extensively so that banks will be comfortable in dealing with it.
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Threat to Centralized Control of Money
In a report from the Manila Bulletin, Mr. Arjonillo said cryptocurrencies are becoming a big threat to the centralized control of money, and that this circumvention will limit the control of the central bank on our money system.
Additionally, he noted the security issues hounding cryptocurrencies despite momentous gains in value that it had in 2017.
Cryptocurrency in PH today
While we have 2 virtual currency exchange in the country, both only deal with bitcoin as of today. Their presence is a good thing as it gives the public easy ways to dabble in cryptocurrencies.
But cashing out is a different matter altogether. Remember that the BSP’s circular in 2017 covered the exchange of bitcoin to fiat money. If you suddenly transferred Php 300,000 worth into your local bank because you gained something when trading bitcoins and altcoins, and if your bank account and banking activity see you only transferring lesser than that amount in the previous months, then transferring that big money to your bank might trigger some alarm bells. The bank personnel will be alerted and you will be asked how did you come across with that kind of money.
Not to mention that the teller might not have an idea about bitcoin trading altogether. In one incident, a lady had her account closed because the money she deposited from her account was from bitcoin trading. This was reverted a few days later when a higher up from BDO called her to assure that the branch that closed her account was misinformed.
Here’s another one:
While we don’t know if problems with cashing out in the Philippines is directly related to the BSP’s “engage but not prohibit policy” when it comes to cryptocurrency, it is believed that a more specific approach towards cryptocurrency will eventually warm up not just the banking sector, but other businesses and industries in transacting with virtual currencies.
Along with the BSP Advisory last year, the Security and Exchange Commission released an official advisory on Initial Coin Offerings this month. In its advisory, it mentioned if the token being issued in such activities are classified as a security, then it should be registered with SEC because of the country’s Securities Regulation Code. But what if the token issued in the ICO is a utility token? Something whose use-case is specific like for earning rewards, etc? This can become a point of contention and discussion in the future.