More virtual currency traders seek BSP nod

MANILA, Philippines — More virtual currency exchange operators are trooping to the Bangko Sentral ng Pilipinas (BSP) to file their applications amid the ongoing efforts to regulate the fast growing but potentially risky industry.

BSP Deputy Governor Chuchi Fonacier said seven companies have expressed interest in becoming virtual currency exchange operators in the country.

“The seven in the pipeline have yet to present business model and to complete submission of required documents,” she said.

The BSP has so far allowed two companies to operate virtual currency exchanges in the country.

Bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds. People could buy and sell bitcoins by tapping dealers or brokers or going to bitcoin exchanges.

Holders could also look for services or goods whose merchants accept bitcoin payments.

Last January, the BSP issued Circular 944 laying down the guidelines for virtual currency exchanges. It is the policy of the central bank to provide an environment that encourages financial innovation while at the same time ensure that the Philippines shall not be used for money laundering or terrorist financing activities and that the financial system and financial consumers are adequately protected.

Thus, the regulator recognizes that virtual currency systems have the potential to revolutionize delivery of financial services, particularly for payments and remittance, in view of their ability to provide faster and more economical transfer of funds, both domestic and international, and may further support financial inclusion.

The BSP required virtual currency exchange operators to register amid rapid increase in the trajectory of transaction fro from a small base.

Latest data showed the volume of bitcoin transactions in the country has more than tripled to $6.98 million per month last year from $2.09 million in 2015.

The BSP circular states virtual currency exchanges providing a facility for the conversion or exchange of fiat currency or government-issued currency to virtual currency are considered similar to remittance and transfer companies and should be covered by Republic Act 9160 or the Anti-Money Laundering Act of 2001.