Bitcoin.com reported last June that the Philippines central bank, Bangko Sentral ng Pilipinas (BSP), was preparing new guidelines towards Bitcoin companies in the region. Now the BSP deputy governor, Nestor Espenilla, has published a circular (BSP Circular №944) that defines the government’s position concerning Bitcoin operations. In the document, the BSP states that it aims to regulate virtual currencies that apply to all payment systems and remittance platforms. Basically, it applies to any operation that may have “material impact on anti-money laundering (AML) and combating the financing of terrorism (CFT), consumer protection and financial stability,” explains the BSP.
The central bank will begin implementing the rules and regulations that govern operations of virtual currency exchanges in two weeks. The BSP circular notes that the new guidelines are not endorsements of bitcoin and other digital currencies. However, the Bank does recognize that virtual currency solutions have great potential. The deputy governor’s circular states:
Bangko Sentral recognizes that Virtual Currency (VC) 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.
Bitcoin Remittance Expert Weighs In
Following the recent BSP circular announcement, Bitcoin remittance expert Luis Buenaventura revealed his opinion of the central bank’s definitions and policies. Buenaventura has done extensive research on Bitcoin’s relationship with global remittances by studying strategies and startups in the crypto-remittance space like Bitspark and Abra. In his opinion, the latest guidelines in the Philippines define all virtual currency exchanges to be treated as remittance companies.
“It certainly appears like the intention is to treat any business dealing with Bitcoin as a remittance agent, even if remittances aren’t the primary purpose of that company,” explains Buenaventura.
The new guidelines do not offer any concessions for order-book exchanges that have no international footprint, nor do they clarify the situation for sole proprietors buying and selling BTC on Localbitcoins. I’m unsure what kind of impact this will have on the Bitcoin startups operating within our borders, but I hope that it won’t put the brakes on the innovative momentum that has been building up over the past few years.
The Central Bank is Learning About Bitcoin, But Definitions Are Too Broad
The Bitcoin industry within the Philippines will have to wait and see how these policies take effect in the country. Buenaventura says bitcoin exchanges and remittance startups have made a lot of progress since 2013, but still have a long way to go. Furthermore, he’s encouraged that the BSP spent a lot of time learning about Bitcoin, but the central bank has “vastly overestimated how much of it is actually used for remittances.”
“From one angle, it’s good news that the government is finally recognizing that we exist and acknowledge that our efforts do have a positive social impact on our country,” Buenaventura adds.