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Virtual currency transactions hit P106 billion in H1

Lawrence Agcaoili - The Philippine Star
Virtual currency transactions hit P106 billion in H1
Stock image of cryptocurrency.
Pixabay / sergeitokmakov

MANILA, Philippines — Transactions in virtual currency, including crypto currency, in the country jumped by 71 percent to P105.93 billion in the first half from P62.12 billion in the same period last year, as the pandemic continues to serve as catalyst to digitalization, the Bangko Sentral ng Pilipinas (BSP) said.

In his weekly online press conference, BSP Governor Benjamin Diokno said the number of transactions from January to June reached 19.88 million, 4.6 times the 4.31 million recorded in the same period last year.

The amount in the first six months already exceeded the P101.61 billion worth of transactions in 2020 which was almost five times the P20.94 billion logged in 2019.

Amid the sharp rise, Diokno reminded the public to transact only through virtual asset service providers (VASPs) registered with the BSP to ensure that appropriate consumer protection and redress mechanisms are in place.

As of end-September, there are 15 VASPs registered with the regulator. These VASPs are mandated to comply with regulations or standards that foster operational soundness and ensure provision of quality services.

Crypto currency is a type of virtual currency that uses cryptography. Bitcoin is the first and most popular crypto currency to date, introduced in 2009.

The BSP also advised the public to be vigilant in their dealings involving virtual assets that are not considered legal tender and not insured by the Philippine Deposit Insurance Corp. (PDIC).

Moreover, it added users of virtual assets should have a good understanding of how these work and carefully consider risk factors such as price volatility and cybersecurity concerns.

Diokno pointed out the value of virtual assets is highly speculative in nature and may easily be influenced by word of mouth.

Furthermore, the regulator warned that virtual assets are also prone to cybertheft, fraud, and hacking, among other cybersecurity risks.

“Thus, virtual assets users should observe basic cyberhygiene practices and understand their rights as consumers,” Diokno said.

When virtual currencies were starting to grow in the Philippine market, the BSP issued an advisory in 2014 to inform the public of the features, benefits and attendant risks when dealing with virtual currencies.

In 2017, the regulator established the formal regulatory framework for virtual currency exchanges (VCEs) following the rise in the use of virtual currencies for payments and remittances in the country.

The Monetary Board decided to recalibrate the approach in handling applications from non-bank institutions for new EMI licenses in line with the thrust of the Bangko Sentral to promote financial stability and strengthen public confidence in the digital economy.

On the other hand, Diokno also reported that the value of electronic money (e-money) transactions jumped 62 percent to P2.41 trillion in 2020 as the volume surged 172 percent to 1.7 billion.

Since the issuance of BSP Circular 649 on e-money in 2009, the BSP chief said market participation and transactions for e-money have soared, especially in the last two years or since the COVID-19 outbreak.

As of end-October, there are already 35 licensed non-bank electronic money issuers (EMls), more than three times the number of players in 2019.

“Non-bank EMIs have also overtaken their bank counterparts in terms of transactions. 2020 figures show that the 172 percent increase in the number of e-money transactions was brought about by the 400 percent growth of transactions for non-bank EMIs, year on year. In contrast, competing banks recorded a six percent decrease in transactions for the same period,” Diokno said.

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