The Philippine Bitcoin Industry Grows Up: A Closer Look at the Upcoming BSP Regulations
In 2014, the Bangko Sentral ng Pilipinas published an ominous warning about Bitcoin, telling people to be careful when using this untested technology. Basically, the message was “Caveat Emptor”, or Buyer Beware.
Shortly thereafter, local startup companies working on Bitcoin technology, along with active individuals in the Bitcoin community, formed the Bitcoin Organization of the Philippines, a non-profit, SEC registered organization, to start a dialogue with the BSP. For the next two years, as the local and global Bitcoin industry grew by leaps and bounds, our dialogue also progressed into the development of a framework that would take the industry out of the gray area and legitimize the business and the technology.
This January of 2017, we have seen the BSP readying the public for coming regulations on what they have called “Virtual Currencies”. What most people don’t know is that this was two years in the making, with a lot of presentations, discussions, meetings, and debates. The BSP understands that Bitcoin and Blockchain as a technology is almost impossible to regulate, but the points where bitcoin enters and exits their monetary system is very much within their jurisdiction in which to provide the proper regulatory guidelines. This is where Philippine Bitcoin regulations will place most of its focus - on where Bitcoin is exchanged to Philippine Pesos, and vice versa.
(See BSP’s Regulations for Virtual Currency Exchanges here)
The result is something we see as beneficial for us at SCI and the entire industry as a whole. Anyone who wishes to enter the space will have to play by the rules set by the BSP, mainly: Be compliant with Anti-Money laundering / Know-Your-Customer practices. No fly-by-night companies. Proper consumer protection. Equal service from the banking system for companies that want to use blockchain technology (the mere mention of Bitcoin in your business can cause your bank to shut down your accounts without warning, even today, as of this writing). It will ensure that the playing field will be more level for bitcoin services to grow and provide alternatives to our somewhat exclusive banking system, and to promote financial inclusion for the 70+ million Filipinos who cannot access basic banking services or participate in digital commerce.
Every step forward that this nascent technology takes today will be historically unprecedented, and it will become the foundation of what is already shaping up to be a totally new and valuable industry, both locally and globally. Thankfully, the BSP can see the potential of Bitcoin and Blockchain technology, and we as an industry helped them realize this by growing our businesses from scratch, creating many jobs, and providing reliable, world-class services to the public.
“You cannot ignore it (Bitcoin) anymore because it’s a growing channel. In the overall scheme of things, it’s not yet that big but it has a potential to grow,” - BSP Deputy Governor Nestor Espenilla
At the end of the day, Bitcoin users shouldn’t be fearing regulation - Bitcoin can and will survive with or without it. But for corporate entities that need to abide by the rule of law, reasonable regulations with the cooperation of the industry and the government will help this industry reach its full potential.