BSP lukewarm on launching own cryptocurrency

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) remains lukewarm to the idea of issuing its own digital currency despite the decision of Facebook to unveil its own cryptocurrency, Libra.

BSP Governor Benjamin Diokno said central banks around the world were divided over the decision of the social media giant to launch its own cryptocurrency during the meeting of the Bank for International Settlements (BIS) in Switzerland late last month.

“I just came from Basel, Switzerland and so we looked at it, “ Diokno said adding the opinion of global central banks were divided on the issue.

The BSP chief has made it clear earlier that the central bank would go easy on cryptocurrencies since this could be used for terrorism financing.

Cryptocurrency is a type of virtual currency that uses cryptography – a method of storing and transmitting data in unreadable form so that only the intended receivers can read and process it. Bitcoin is the first and most popular cryptocurrency to date, introduced in 2009.

Diokno added the value of cryptocurrencies particularly bitcoin remains very volatile.

“We have to be open to innovation except that we also have a responsibility to consumer. Let’s give it another three to five years,” Diokno said.

Latest data from the BSP’s Technology Risk and Innovation Supervision Department showed the value of transactions involving virtual currencies almost doubled to $390.37 million last year from $189.18 million in 2017.

Following the rise in the use of virtual currencies for payments and remittances in the Philippines, the regulator established a formal regulatory framework for virtual currency exchanges through Circular 944 dated Feb. 6, 2017.

The BSP has so far approved the registration of 11 virtual currency exchanges including Bexpress Inc., Bitan MoneyTech Co. Ltd., Coinville Phils. Inc., ABA Global Phils. Inc., Betur Inc. (Coins.ph), Rebittance Inc., BloomSolutions Inc., Virtual Currency Philippines Inc., ETranss Remittance International Corp., Fyntegrate Inc., and ZyBi Tech Inc.

The BIS, the central bank for all central banks, had expressed fears that initiatives like Libra pose a long-term threat to central banks’ control of money.