Surge on Using Cryptocurrency: Philippines Central Bank Issues its Risks Warning

With the use of cryptocurrency going fast in the country, the Philippines Central Bank Chief has issued a warning over the perils of using it.

Benjamin Diokno, Governor of the Bangko Sentral ng Pilipinas on June 10, Monday cited that his governing body will continue to direct the usage of cryptocurrencies, particularly providing it for the constructive usage of technology in the financing of terrorism.

Diwa Guinigundo, the deputy governor of the Central Bank, also described clearly about the restrictions on the cryptocurrency as an alternative for fiat money, a mode of interchange and actual value.

At the same time, blockchain and cryptos are proved to be beneficial for settlement, they efficiently permit the users to bypass the banking system.

To stabilize the rapid innovation with minimization of risks, the Central Bank considers using the governing sandboxes to maintain the superintendence of aforesaid novel technologies,  Guinigundo stated.

The warning of the Central Bank appears as a result of the rise of using cryptocurrencies in the Philippines. The PhilStar formerly stated that transacting through online currencies in Southeast Asian countries nearly doubled from $189.18 million in 2017 to $390.37 million previous years, subject to the compilation of data by the Technology Risk and Innovation Supervision Department of the Central Bank.

Those Philippines transactions involve converting from Philippines pesos and rest of the fiat currencies to cryptocurrencies and vice versa, in addition to the inbound international allowances expedited through cryptocurrencies.

In response to the rapid use, the Central Bank in February 2017 released a circular authorizing cryptocurrency interchanges to register with the Central Bank as remittance and transfer companies, and later on need these companies to establish safety protocols to ensure the protection of consumers and combating illegitimate transactions such as terrorism funding and money laundering.

The Central Bank laid emphasis that it does not wish to endorse any cryptocurrency since it is neither guaranteed nor issued by the Central Bank or supported by a commodity. Nonetheless, the regulatory body stated it focuses on regulating the technology on where to use for furnishing of financial services, especially for remittances and payments in order to ensure stability in finances and protection of consumers

Till date, only 10 Philippines exchanges have been enrolled with the Central Bank.