BSP: Bitcoin okay but requires regulation

The Bangko Sentral ng Pilipinas (BSP) is open to the use of cryptocurrencies but cited the need for vigilance since these are not regulated by any central bank, Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr. said.

In a panel discussion during the 12th Philippine Forum: Reform and Transform, held by the business magazine The Asset at the Conrad Hotel in Pasay City, Espenilla said the currency, however, has become attractive to investors because it is not issued by central banks.

Some central banks are considering to issue their own digital money, he said, adding that this topic was even discussed “at the highest levels of financial regulatory community”.

In the case of BSP, Espenilla said they had issued several circulars on the new form of money, one of which allowed the use of cryptocurrencies, particularly Bitcoin, for remittance transfer services, provided that companies involved in the use of virtual currencies register with the BSP.

Virtual currencies, introduced around 2009, with Bitcoin being the most famous, are not backed by any commodity, such as gold or silver, unlike legal tenders issued by central banks.

Espenilla said cryptocurrencies has the advantage of ensuring efficient money transfer services, among others, but noted that it could also be used for money laundering and other activities.

`Thus, the BSP requires entities that have been allowed to use Bitcoin for money remittance services to heed anti-money laundering regulations, follow reporting requirements, and put in place consumer protection measures.

“We also realize pragmatically that even as we talk, it grows, whether or not we like it. So rather than prohibit something that is very hard to prohibit anyway, we choose to engage and the industry has accepted that engagement to the BSP,” he said.

Espenilla said they remain cautious and are on the lookout for the results of experiments on the use of cryptocurrencies worldwide.