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Philippines Takes On Regulatory Innovation To Become Global Fintech Player

By: Abigail Opiah

Most startups in the areas of digital and financial technology, can see regulators as hurdles to progress, but the Cagayan Economic Zone Authority (CEZA) in the Philippines is proving otherwise.

At a conference in Kuala Lumpur, Malaysia last month, CEZA Chief Executive Officer and Cabinet Secretary Raul Lambino shared with IP Ventures CEO Enrique Gonzalez how the economic zone is creating new opportunities for private sector-regulator relationships by embracing innovation.

“Like in most jurisdictions, the Central Bank, SEC, and Finance Departments can be conservative in allowing the immediate proliferation of disruptive technologies,” said Lambino.

“We are very thankful to those responsible for crafting the bill becoming into law, creating the special economic zone with provisions allowing financial technology and banking practices to be developed in this zone.”

In February 2017, the Philippine Central Bank published Guidelines for Virtual Currency Exchange.

“With this, we were able to craft several rules and regulations. The first one is our financial technology resolution and our cryptocurrency exchange resolution,” added Lambino.

Around $8bn have been pledged in investment commitments to CEZA by companies from all over Asia.

In terms of the cryptocurrency industry, CEZA has issued more than 30 licenses to global cryptocurrency exchanges who have all pledged investment commitments to the zone.

Also during the conference, presumed incoming Malaysian Prime Minister Dato Seri Anwar Ibrahim had a sit down interview with Patrick Grove, CEO of Catcha Group, to outline his plans for small and medium enterprises (SMEs) and start-ups in the digital economy.

Philippines approves first Digital Asset Token Offering

The Cagayan Economic Zone Authority, Asia Blockchain and Crypto Association and First Bullion Holdings jointly announced the certification of the Flourish City Development Limited Digital Asset Token Offering, the first asset-backed token offering approved by the pair.

The first DATO with FCD serves as a test case to study token offerings, monitor transactions and further enact rules and regulations which will develop industries, foster growth and protect the investing public.

FCD is a leading plantation owner, developer and producer of agarwood, oud oil and related products.

It was revealed that FCD is planning to raise $4.9m from the sale of 40 million AGWD tokens, and the net proceeds will be used to expand and develop FCD’s agarwood plantation.

“This is incredibly exciting for everyone taking part in the DATO, and each stakeholder, including the accredited auditors, escrow agent, company valuation expert and digital asset (DA) agent, worked very hard to fulfill all the requirements,” said First Bullion Chairman Philip Tam.

“The whole DATO process is based on established IPO frameworks in major markets. We are a firm believer in regulation and compliance as crowdfunding and ICOs have, over the past couple of years, attracted many bad or fraudulent projects.

“Together with CEZA and ABACA, we want to set the benchmark for DATOs which is based on real business, seasoned management teams, sustainable assets and good business practices.”


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