Philippines to Regulate the So-Called Initial Coin Offerings

As Bitcoin Use Surges, Philippines Central Bank to Regulates ICOs

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Governor of the Philippines central bank, Nestor Espenilla has said that “Bangko Sentral ng Pilipinas” is in talks with the nation’s Securities and Exchange Commission on ways to run ICOs, in which businesses raise funds through the sale of digital tokens. Businesses are seeking to facilitate ICOs and act as a central counterparty for trade in the related tokens to in order to take advantage of the “strong growth potential in this space,” Espenilla said in an email.

The use of bitcoin and other cryptocurrencies is on the increase especially among Filipinos in diaspora sending money home, as they offer a cheaper and quicker way to move cash. The central bank estimates remittance transactions using bitcoin are now worth about $6 million monthly, this is three times the volume recorded last year.

Though that represents a small proportion of about $2 billion of funds that Filipinos in diaspora send home every month, the increasing use of cryptocurrencies has caught the attention of local regulators.

Commissioner Ephyro Amatong stated in a mobile text message “The SEC is concerned about possible unlicensed investment-taking activity or otherwise selling of investment contracts in the guise of so-called cryptocurrencies via a so-called initial coin offering.”

The Philippines central bank in February asked businesses using virtual currencies to register as a remittance company or a money changer, conduct client checks and report suspicious transactions, following through on a pledge a year ago to oversee the industry.

Firm in virtual currency business had welcomed that development, Espenilla said. Yet, it “does not, in any manner, establish an authorization of virtual currency as legal tender, store of value or investment instrument,” he added.

Governments and regulators around the world are seeking to come to terms with how to treat cryptocurrencies as their prices soar to fresh records almost daily, contributing to a surge in ICOs over the past year. Bitcoin, the biggest cryptocurrency by market value, has surged 12-fold this year and recently changed hands at more than $11,000.

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