The Philippines’ economic zone is projecting to generate approximately $68 million from the issuance of crypto licenses.
In a statement, the Cagayan Economic Zone Authority (CEZA) said it is expecting to earn about P3.6 billion or $68 million from the initial 25 offshore financial technology and virtual currency firms seeking to operate in the country’s economic zone.
CEZA Administrator Raul Lambino explained the estimated profit included the $1 million (P53.42 million) each firm had pledged to invest and excluded is on top of the 0.1 percent share for each transaction value of registered digital coin exchanges.
The interest expressed by offshore companies to operate in CEZA “surpassed all our expectations,” Lambino said, adding that fintech operations are expected to create an initial 20,000 jobs.
CEZA said the income from crypto license applications and fees surpassed 2017 revenue by over 50 percent. It booked earnings of P205.97 million from these companies in end-June, increasing its total revenue by 219 percent to P340.62 million in the first six months of the year from P106.76 million in the same period last year.
It also exceeded the P224.54 million reaped by the agency, primarily from online gaming businesses, in 2017.
“The overwhelming interest by offshore firms in financial technology solutions and cryptocurrency trading wanting to [operate in] the Cagayan Special Economic Zone has supassed all our expectations,” Lambino said.
Meanwhile, CEZA reported 17 firms have already paid in full and 19 more are in the pipeline.
“17 fintech and offshore virtual currency firms have already paid in full the application and license fees for the digital coin trading under Ceza … 19 companies are in the pipeline to pay their application and license fees to CEZA,” Lambino said.
Earlier, CEZA awarded a license to Liannet Technology Ltd., a unit of the Apsaras Group. The first one was given to Hong Kong company Golden Millennial Quickplay Inc. in June. “Other firms that had already paid fees to operate in Ceza were Formosa Financial Holdings, Sino-Phil Economic Zone Agency Development and Management Corp., Asia-Pacific International Ltd., Hong Kong Yuen Shing-Hong Ltd., Tanzer Inc. and Rare Earth,” a local report said.
The economic zone said at that time it would release 25 licenses enabling firms “to establish a financial tech, crypto, and blockchain office” at the zone. Originally, it intended to issue only 10 licenses.
“Each crypto exchange will be required to invest at least USD1 million or around PHP53 million within two years and it must have a back office in the Philippines. Firms must also be registered with the Securities and Exchange Commission,” Lambino had said at the Global Blockchain Summit.
“Although CEZA will only issue 25 licenses, each exchange will have 20 to 30 sub-licenses for traders and brokers,” Lambino clarified. As of writing, CEZA has already received over 60 applications.
“There are many operating scammers who set up an exchange with very little capital and they are victimizing investors…We do not want the Philippines to be a haven for scammers even if these scams are happening abroad. That’s why through our probity and integrity check we can determine if their transactions are just designed to entice unsuspecting people to invest in bitcoin or whatever crypto coin that is a fraud,” he explained.
Featured image from Block News é