BSP open but cautious on cryptocurrencies

FILE: (Photo: Bangko Sentral ng Pilipinas/Facebook)

MANILA — Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. on Tuesday assured the openness of Philippine monetary officials to cryptocurrencies but cited the need for vigilance since these were not regulated by any central bank.

In a panel discussion during the 12th Philippine Forum: Reform and Transform, held by the business magazine The Asset at the Conrad Hotel in Pasay City, the central bank chief explained that one discussion strand on this issue is that the currency is attractive to investors because it is not issued by central banks.

Another strand is the fact that some central banks are considering to issue their own digital money, he said, adding that this topic was even discussed “at the highest levels of financial regulatory community”.

In the case of BSP, Espenilla said they had issued several circulars on this topic, one of which allowed for the use of cryptocurrencies, particularly Bitcoin, for remittance transfer services, provided that companies involved in the use of virtual currencies register with the BSP.

Virtual currencies, introduced around 2009, with Bitcoin being the most famous, are not backed by any commodity, such as gold or silver, unlike legal tenders issued by central banks.

The central bank chief said cryptocurrencies were a plus to ensure efficient money transfer services, among others, but noted that it could also be used for money laundering and other activities.

Thus, the BSP requires entities that have been allowed to use Bitcoin for money remittance services to heed anti-money laundering regulations, follow reporting requirements, and put in place consumer protection measures.

“We also realize pragmatically that even as we talk, it grows, whether or not we like it. So rather than prohibit something that is very hard to prohibit anyway, we choose to engage and the industry has accepted that engagement to the BSP,” he said.

Espenilla said they remain cautious and are on the lookout for the results of experiments on the use of cryptocurrencies worldwide. (PNA)