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The Central Bank of Philippines, Bangko Sentral ng Pilipinas has released a notification that makes it easier for Bitcoin exchanges in the country to operate. The new “Guidelines for Virtual Currency (VC) Exchanges” was approved by the country’s Monetary Board.
According to the regulation, all cryptocurrency exchanges operating in the country will have to register themselves as Non-Banking Financial Institutions. The Central Bank has introduced these regulations in the light of increased usage of Bitcoin for remittance within the country.
Bangko Sentral, in the notification clearly mentions that the banking institution understands Bitcoin’s potential benefits and it doesn’t intend to hamper innovation in the sector. The central bank is quoted in the circular stating,
“The Bangko Sentral does not intend to endorse any VC, such as Bitcoin, as a currency since it is neither issued or guaranteed by a central bank nor backed by any commodity. Rather, the BSP aims to regulate VCs when used for delivery of financial services, particularly, for payments and remittance, which have material impact on anti-money laundering (AML) and combating the financing of terrorism (CFT), consumer protection and financial stability.”
The guidelines for cryptocurrency exchanges also outlines various obligations and compliances on the exchanges’ part as well. Bangko Sentral classifies cryptocurrency exchanges among remittance and fund transfer companies. The platforms will be governed by Section11 of Republic Act no. 9160 or the Anti-Money Laundering Act of 2011 along with the Revised Implementing Rules and Regulations and other applicable regulations issued by Bangko Sentral.
The approved guidelines facilitate mainstream adoption of Bitcoin and other cryptocurrencies. The digital currencies are equivalent to foreign currency, except for the absence of guarantees on Bangko Sentral’s part. However, the regulations also increase the costs of operations of the virtual currency exchanges, in terms of compliance requirements. But given the tremendous opportunities and scale of usage, the platforms will not be affected by it.
Read the full notification here
Ref: Bangko Sentral | Image: ManilaLiveWire