November 7, 2019 – To achieve full financial inclusion, digital technology and private and public cooperation are necessary. This is a key theme at the 3rd annual Asia Finance Forum in Pasig organized by the Asian Development Bank (ADB) this week.
According to Bambang Susantono, ADB Vice President for Knowledge Management and Sustainable Development, expanding financial access can be done by pilot testing new technology and new applications in regulatory sandboxes, which are closed environments necessary to ensure things are ironed out first.
It can be remembered that the Bangko Sentral ng Pilipinas (BSP)’s approach to virtual currencies is that of a regulatory sandbox. Through the Circular No. 944, interested companies may apply for a virtual currency license to operate a crypto-to-fiat (and vice versa) business.
Aside from digital technology, others that can potentially expand financial inclusion are distributed ledger systems (like blockchain), biometrics, and digital ID. The BSP is also leading the initiative for the National ID system. Issuance of which will start in April 2020. Susantono, however, said potential risks must always be recognized, like maturity mismatches, cybersecurity threats, and regulatory challenges. Also important is to be aware of the risk of money-laundering.
Cryptocurrency is recognized by the BSP as another application of blockchain that has its own advantages and disadvantages. Recently in the Senate, a “cryptocurrency task force” is sought out to study the field of fintech, digital assets, and cryptocurrency. Included in the task force are the BSP, the SEC, the Department of Finance, as well as members of the Fintech Alliance PH such as SCI Ventures.
This article is published on BitPinas: Keys to Financial Inclusion Discussed at the Asia Finance Forum