The financial regulator of the Philippines, Bangko Sentral ng Pilipinas (BSP), has created a blockchain and fintech unit to monitor the new emerging industry in the country. This unit will help oversee and regulate the institutions involved.
BSP Governor Mr. Nestor Espenilla Jr. shared in a speech during an event focused on payments and settlements that the regulator recently created a new unit. This new unit called Financial Technology Sub-Sector (FTSS) will “conduct effective oversight of FinTech and other innovative alternatives,”. The said unit will also have Mr. Vicente de Villa III as its head.
“An efficient retail payment system has the potential to transform the economy through the efficiency it brings to business transactions and the savings generated from a shift from paper-based to digital instruments,” – Mr. Nestor Espenilla Jr., BSP Governor
According to Mr. de Villa the fintech and blockchain unit, FTSS, will have two divisions. One is the Payment System Oversight Department and the other is Core Information Technology Specialist Group.
The Payment System Oversight Department will be in charge of implementing the BSP’s effort of widening the use of electronic payment or the National Retail Payment System (NRPS). The Core Information Technology Specialist Group, on the other hand, will supervise the information technology (IT) and its examination being used by banks and other financial institutions.
“We are still overseeing banks, but banks and technology nowadays have to come hand-in-hand, … There’s an outsourcing that takes place and we have to make sure that these outsourcing services are governed by our rules and regulations.” – Mr. Vincente de Villa III
The financial regulator aims to raise the total of e-payment to 20% by the year 2020. BSP believes that by embracing the blockchain technology together with other fintech firms will help it drive the change.
The Central Bank is also thinking of issuing its own central bank-issued digital currencies (CBDCs). The BSP governor said that it is carefully probing its possibility and “what it means for the supply of credit and the impact on the financial system,”.
The BSP currently has five licensed virtual currency exchange in the country. The first was Betur, Inc. (known as Coins.ph) that received its license on September 2017. Next is Rebittance, Inc., a wholly owned subsidiary of SCI Ventures, on October 2017. The third is BloomSolutions in May 2018 and the latest is ETranss and VCPI that both received it in July 2018.
This article is originally published on August 24, 2018.