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Recto: Dept. of Finance, SEC to Coordinate to Draft Crypto Guidelines

Photo for the Article - Recto: Dept. of Finance, SEC to Coordinate to Draft Crypto Guidelines
  • DOF Secretary Ralph Recto revealed a collaboration with the SEC to formulate thorough guidelines for overseeing cryptocurrency registration and trading.
  • Recto emphasized the importance of caution, particularly noting the prevalence of cryptocurrency scams and the need for scrutiny regarding their viability.
  • The coordination between the DOF and SEC aims to establish a regulatory framework that considers the development of the capital market.

To regulate the registration and trading of cryptocurrencies in the country, Department of Finance (DOF) Secretary Ralph Recto disclosed that the department is coordinating with the Securities and Exchange Commission (SEC) to establish comprehensive guidelines.

DOF x SEC Crypto Guidelines

At the induction of officers at the Economic Journalists Association of the Philippines, Recto mentioned that discussions with the Commission included considerations for cryptocurrency guidelines in the context of capital market development.

“We have to be careful with these since many cryptocurrencies are scams and not all of them are probably viable.”

Ralph Recto, Secretary, Department of Finance

Appointed in January, Recto stated that tax collection is his term’s top priority, aiming to collect P4.3 trillion this year. Despite economic challenges, he ruled out new taxes due to their inflationary impact. 

SEC on Drafting a Crypto Guideline

PH SEC to Release Digital Asset Security Service Provider Rules By Q1 2024 #shorts

In December, the SEC disclosed its plans to introduce the Digital Asset Security Service Provider Rules. These regulations aim to create a comprehensive legal framework for digital assets, particularly focusing on those considered securities. The Commission notes that it will focus on broader cryptocurrency usage and ecosystem regulation to prevent issues like the FTX incident.

However, it can be remembered that the SEC previously mentioned that the rules were expected to be released by the end of 2023 or the first quarter of 2024. Despite this, as the second quarter of 2024 enters, there has yet to be an update regarding these rules.

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Apart from these, the SEC regulates digital assets through advice on initial coin offerings (ICOs) and cryptocurrency investments, requiring registration and compliance with securities regulations.

Recent SEC Action on Crypto Entities

Why Did The SEC Wants to Binance in the Philippine

Almost a month after the supposed three-month deadline after its advisory in November 2023, the Commission En Banc sanctioned the submission of a formal request to the National Telecommunications Commission (NTC) for aid in blocking Binance’s website and associated web pages. The crypto exchange was noted for offering an investment and trading platform without the necessary license from the Commission.

In February, similar measures were made against other unlicensed platforms like OctaFX and MiTrade.

The regulatory outlook for cryptocurrencies in the Philippines involves oversight from both the BSP and the Securities and Exchange Commission (SEC). While there isn’t a specific law dedicated to cryptocurrencies, Circular No. 944 issued by the BSP in 2017 recognized virtual currencies as valid payment methods, requiring exchanges to register and adhere to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. 

Read: What are the Seven Notable Crypto-Related Regulations in PH & Their Impact on the Community?

Further regulations were introduced in 2021 with the Guidelines for Virtual Asset Service Providers (VASPs), mandating licensing and emphasizing Know Your Customer (KYC) and AML/CTF measures. However, the central bank has halted new VASP licenses until September 2025

In February, the Monetary Board, the policymaking authority of the Bangko Sentral ng Pilipinas (BSP), canceled the VASP registration of ATOMTRANS TECH CORP.

The BSP also follows the Financial Action Task Force (FATF)’s Travel Rule, the central bank recently issued a memorandum providing clarity on its requirements for local VASPs. The memorandum addresses aspects related to peer-to-peer transactions and outlines regulatory expectations for transactions involving unhosted wallets. 

Read: Global Regulatory Outlook for Cryptocurrencies 2024

This article is published on BitPinas: Recto: DOF Collaborates with SEC to Draft Crypto Guidelines

Disclaimer:

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