The Cagayan Economic Zone Authority (CEZA) has committed to approve an initial 25 fintech (financial technology) firm locators which are expected to bring in P1.3 billion in initial investments or $1 million per company.
CEZA Administrator and CEO Raul L. Lambino told reporters at the Blockchain Industry Development Global Forum at the Grand Ballroom Marriott where he was the keynote speaker that more than 70 fintechs are seeking registration.
“We will be issuing 25 principal licenses for offshore cryptocurrency initially, but there are more than 70 big companies that have tendered their interest to apply,” Lambino said. Three have already submitted their requirements while half of the applicants are completing theirs.
According to Lambino, the initial investment requirement is $1 million per fintech company and which must be poured in over a span of two years.
These companies will also be located and lease office spaces in the identified CEZA financial centers in its three buildings in Pasig, Greenfield Mandaluyong, and Arthaland Towers in BGC.
As offshore crytocurrency, their local operation will initially be limited as back end support or BPO services catering to their clients overseas. No locals are able to participate in their operations.
Lambino, however, said that they are still evaluating their applications to ensure that they will not engage in illegal activities such as money laundering and into funding for terrorism acts.
The safeguards are important because these fintechs could also evolve later on to engage in blockchain technology and digital exchange.
One criteria is for the applicant to establish a Philippine branch.
Another criteria is that the principal license of the fintech company can only be transferred upon the approval of CEZA.
Lambino, however, said that once these fintechs go into blockchain and conduct initial coin offering, they will have to seek approval from the Bangko Sentral ng Pilipinas and the Securities Exchange Commission.
CEZA is also in discussio. with the BSP and SEC to craft the regulations for the cryptocurrency space.
Operations such as these will not only require the $1 million investment per company but huge investment and thorough regulation, Lambino said.
“They should be asset-backed in the form of minerals and oil or other hard assets,” he said.
Lambino said that the first fintech applicants attended the first Fintech Summit conducted by CEZA last month.
“These are well known companies including five from Korea led by Hana. Others are from Malaysia, Singapore and Hong Kong,” he said.
There have been new interests arising from the Blockchain Summit, but Lambino said they still have to determine the integrity of these firms.