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Editing by Nathaniel Cajuday
With the increasing adoption of blockchain and other web3 technology in the Philippines, new regulations are bound to emerge as well.
In a panel discussion featuring the leading digital asset companies in the country, the speakers tackled what would happen if they failed to follow regulations. If these entities do not follow the regulators, in simpler terms, according to Coins.PH CEO Wei Zhou, they will go to jail:
“We follow the rules and the guidelines that the BSP (Bangko Sentral ng Pilipinas) has laid out to the virtual assets providers. We are voters of this country and we follow the rules of this country. It’s pretty straightforward… it’s what happens when you have a regulated business, you have regulators, you have regulatory oversight in your business. And what happens when I don’t do that? I will go to jail.”
“So it’s pretty black and white question and answer. I don’t need to say I’m doing this and that. I follow the rules. Pretty easy answer,” Zhou added.
Aside from Zhou, the speakers on their panel also include global crypto exchange Binance General Manager for the Philippines, Kenneth Stern, homegrown crypto exchange Philippine Digital Assets Exchange (PDAX) Founder and CEO, Nichel Gaba, and digital asset company Amber Group General Manager, Farrah Rodriguez. The moderator for the talk was Gorriceta Law Managing Partner Mark Gorriceta.
While financial regulations on digital assets are still not properly in place, Zhou noted that there are two things that people care about from a regulatory perspective: custody and anti-money laundering viewpoints.
“In my mind, that is smart regulation; focus on the key things and keep it consistent and then you modify overtime,” he stated.
Gaba, on the other hand, stated that the situation and the variables around the industry also make it hard for regulators to find balance, as they have to ”consider the growth of the industry on the one hand and also protect consumers on the other.”
“But for me one thing is clear, there is too much regulation if there is not enough enforcement to align with the amount of regulation. If we have very minimal regulation but if it’s strictly enforced and everyone is playing by the rules then perfect,” he noted.
However, he added that currently, the global industry is at the point where there are several existing laws that are not strictly enforced, which results in penalizing regulated players.
On the other hand, Stern stressed that Binance’s stance on regulations is that the firm “welcomes regulation.” Currently, Binance is still not properly licensed in the country, but the firm was aiming to acquire a local company that already has virtual asset services provider (VASP) and electronic money issuers (EMI) licenses from the BSP. (Read more: Binance Exec Reveals Plans to Acquire PH Firm that Will Secure VASP License)
“I think about too much regulation (when regulators, in a way, are) halting innovations and not allowing companies to continue to push the boundaries, but too little would create gray areas and confusion… I think it is important to be regulated, but I think an understanding of what the regulation means is equally important,” he stressed.
For their market integrity, Rodriguez then revealed that their firm was keen on producing a financial audit for their entire group as well as publishing their proof of reserve and how exactly they are managing the funds of their customers. She also disclosed that they have been open about stating that they are spending a quarter of their operations budget on cybersecurity.
“It is very important to us in Amber to comply in every market that we try to go into. We have yet to secure a license in the Philippines, but our experience in Asia tells us that each market has its own approach, and we respect that and we want to comply with that. So, we want to work with regulators and help out and (learn) how we can push this forward faster,” she concluded.
The discussion was part of the second day of the three-day conference of the recently concluded Philippine Web3 Festival held at the Maquis Events Place at the Bonifacio Global City (BGC) in Taguig. Access the live coverage for day 1 and day 3 here. (Read more: PH Web3 Festival Targets to Bring Global Attention to Homegrown Talents)
This article is published on BitPinas: Coins.ph CEO on What Happens if BSP-Licensed Exchanges Do Not Follow The Rules
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.