Another Asian country is getting the hang of using cryptocurrencies.
The popularity and legality on the use of digital currency are invading one country after the other.
Filipinos have shown their interest and continued support on the use of digital currencies. The use of cryptos in this country did not just double, but tripled in the past few months.
The report from the Banko Sentral of the Philippines shows a staggering 200% increase from February to this month.
This astounding news will help the central bank to create guidelines on the use of cryptocurrency further. It will also impact the trust rating of digital currency.
Cryptocurrency use in PHL triples
The use of virtual money, known as the cryptocurrency, in the Philippines has grown three times its size from when regulators first issued guidelines, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.
From transactions valued at some $2 million a day in February this year, cryptocurrency transactions at present average $6 million daily instead, or an escalation by 200 percent.
But cryptocurrencies, most notably Bitcoins, are hounded by issues of trust and are infamously volatile, which is why their adoption has not been as widespread as their supporters want them at this point.
And this is also why the BSP is still evaluating the use of cryptocurrencies in local commercial transactions before allowing for their unhampered use in the Philippines.
“That’s an experiment, We’re not yet there. There’s a lot of experimentation going on in some countries. We’d like to see first how that works. So, in a way, it’s cautious, but it’s also not prohibiting. In my mind, it’s too soon to move in that direction,” BSP Governor Nestor A. Espenilla Jr. said at The Asset forum on Tuesday at a local hotel.
For one, issues on strengthening the technological capacities and operational aspects in the country will need to be addressed before implementing such a platform.
Citing as an example hacking instances on electronic or virtual wallets is still being experienced, making the platform volatile.
“To begin with, the trust level for cryptocurrency is not that high at this point in time. And there are many technical, as well as operational, issues because these things have value. They are traded like commodities. Right now, they are at historical highs. If you want to use these things as payments, you don’t want it volatile,” he added.
Earlier in the month, the BSP released guidelines on cryptocurrencies or the exchange of virtual currencies under BSP Circular 944. Transactions using the digital coins were seen growing at an estimated $6 million daily from $2 million to $3 million.
“First of all, we see the benefit of cryptocurrency in promoting efficient money transfer services, for example. But we also realize that cryptocurrency can be used for such schemes like money laundering and other criminal activities,”
According to the BSP, digital currencies can be used for money-laundering practices but can be countered by anti-money laundering controls and know-your-customer procedures.
“So we issued regulations earlier this year. We have actually allowed the use of cryptocurrency in remittance services, but we also impose obligations to fulfill anti-money laundering commitments. Reporting requirements with these things become visible and also put in place basic consumer protection arrangement,” he added.
Espenilla said the BSP only tries to regulate the exchange of cryptocurrencies but, as soon as these are converted into regular money, that is where the anti-money laundering indicators set in.
“What the BSP is trying to regulate is the exchange, when you convert a cryptocurrency, such as Bitcoin, into the equivalent of normal money, that’s the point that it touches the real world. That’s really where we have put in place controls, such as money-laundering controls so that it’s more visible and we can understand what’s happening,” he said.
In August the BSP approved the registration of two companies who want to engage in the operation of Bitcoins, This was part of efforts to regulate the fast-growing virtual currency industry.