The Philippine market regulator, the Securities and Exchange Commission (SEC), announced on Monday that a new draft regulation on digital currency exchange operations would be out this month, as the government seeks to limit the number of companies willing to offer virtual currency trading platforms in the country.
Speaking to reporters after an en banc meeting, SEC Commissioner Ephyro Luis B. Amatong said they hope to come out with final rules before the end of this year.
“We will put out a draft rule for the virtual currency exchanges hopefully within the first half of September,” he said. “Virtual currency exchanges (VCEs) have licenses similar to that of money changers. They can exchange from cryptocurrency to fiat currency. But many of the VCEs, all of the VCEs are applying to allow them to act as trading platforms. When the trading platforms come in, this is a concern of SEC that we will discuss with BSP (Bangko Sentral ng Pilipinas) we will have a joint cooperative oversight.”
At the same time, the SEC commissioner said his agency is in talks with BSP to create a joint cooperative oversight over the cryptocurrency exchanges.
The BSP defines digital currencies as a “type of digital currency created by a community of online users, stored in electronic wallets, and generally transacted online.” As such, the bank said the government and the central bank do not guarantee cryptocurrencies. The BSP noted that VCEs are businesses engaged in the trading and converting cryptocurrencies into fiat currency or vice versa.
In a circular, the BSP said VCEs are required to have security measures and safeguards to address the risks associated with digital currency exchanges, such as basic controls on anti-money laundering and terrorist financing, consumer protection, and technology risk management.
According to Amatong, the proposed regulations on digital currency exchanges seek to promote investor protection while allowing small and medium enterprises (SMEs) an alternative means to raise capital.
He added that the government aims to create a business climate that provides investors’ confidence where they can invest in securities that have a digital form. “Instead of paper or securities that are housed within PDTC (Philippine Depository & Trust Corp.), the depository they’re being proposed to be accommodated on a blockchain.
Featured image from Cryptovest é