By Shiela Bertillo
The Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) said on Monday that Axie Infinity, a play-to-earn online game, isn’t required to register with them right now, but the regulating agencies are closely monitoring the game if it grows in popularity.
These regulators say if the use of Axie Infinity’s cryptocurrencies increases in the Philippines, they may have to step in, to offer some form of protection to Filipino players and investors.
“We are not yet requiring Axie infinity to register with the BSP,” said Melchor Plabasan, Director of the BSP’s Technology Risk and Innovation Supervision Department.
“Ang pinagaaralan namin is yung payment component. Papaano pag napakaraming merchants sa Pilipinas ang nag-a-acept ng SLP (smooth love potion),” Plabsan said in a YouTube video posted over the weekend.
[Translation] “We are studying its payment component. What should we do once more merchants in the Philippines start accepting SLP?” Plabasan said.
Plabasan also noted that they are currently only looking at the payment component. Especially if more merchants in the Philippines start accepting Smooth Love Potion (SLP), one of the cryptocurrencies in the game, as payment.
This issue was also addressed by the BSP last month saying that they are closely monitoring Axie Infinity in regards to how players and merchants are exchanging SLP as a form of payment. The central bank is not considering Axie Infinity as a virtual asset service provider (VASP) but they are open to its possibility to be classified as an operator of payment system (OPS). And if it is one, the BSP is encouraging Axie Infinity or its creator Sky Mavis to register. (Read more: BSP Closely Monitors Local Axie Infinity SLP Merchants System)
Likewise, last July, BSP ordered the suspension of Lyka, a social media platform, on the grounds of unauthorized operation as a payment system.
Lyka with the use of its Gift cards in Electronic Mode (GEM) allows its users to purchase goods and services.
The BSP said that new rules on such digital assets would have to be discussed in the Financial Sector Forum (FSF).
The FSF is a voluntary inter-agency forum composed of the BSP, SEC, and the Insurance Commission and the Philippine Deposit Insurance Corporation (PDIC).
These financial regulators signed a memorandum of agreement that establishes a cooperative oversight framework on fintech innovation last February 2021.
The framework aims to facilitate seamless regulation and supervision of fintech companies across the financial sector leveraging on the consultative and collaborative platform under the MOA.
Under the framework elimination of regulatory arbitrage and promoting adherence to standards on cybersecurity, anti-money laundering and the combatting of financing of terrorism (AML/CFT) and consumer protection are to be expected.
Meanwhile, BSP reiterated that the public should only transact with firms registered to deal with virtual assets.
“In this regard, the BSP reminds the public to transact only with BSP- registered Virtual Asset Service Providers (VASPs) which are required by Circular No. 1108 to set up consumer awareness measures. Such measures are intended to educate end-users of the risks associated with acquisition and trading of virtual assets, the cybersecurity procedures for safeguarding their digital wallets, the fees related to the use of the platforms and the problem resolution procedures.”
As of July, there are 15 BSP-registered VASPs that can facilitate the exchange/trading of virtual assets to and from the Philippine peso, BSP added.
Plabasan also addressed public concerns that Axie Infinity is a ponzi scam.
“I think right now, it is really, it is a virtual game. Mukhang hindi naman siya Ponzi scheme (It doesn’t look like a Ponzi scheme).”
This article is published on BitPinas: BSP, SEC: Axie Infinity Aren’t Required to Register Yet