MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) may require operators of virtual currency exchanges to also secure an electronic money issues (EMI) license in a bid to protect consumers.
On the sidelines of the 2018 National Convention of the Chamber of Thrift Banks (CTB), BSP Deputy Governor Chuchi Fonacier said the central bank may add another layer of authorization for virtual currency exchanges which offer a business model with a variation.
“We have to carefully review and assess whether just the registration of being a virtual currency exchange per se would suffice. But the way things are right now, the business models that they are presenting to us, it might require another layer of authorization,” Fonacier said.
Fonacier said various business models submitted by applicants for virtual currency exchanges contained variation which involve requiring customers to maintain an electronic wallet.
“It might come not just as a virtual currency exchange, it might come also with a license to be an EMI depending on the business model presented that would go hand in hand with being a virtual currency exchange to be registered with the BSP,” she said.
To become an EMI issuer, Fonacier said applicants should comply with the capital requirement of between P100 million and P150 million.
Fonacier said there are 29 pending applications under different stages of processing such as ongoing evaluation, awaiting submission of documentary requirements, and for presentation of business model.
Virtual currency exchanges are companies or businesses engaged in changing virtual currencies into fiat currency (and vice versa). The act of converting virtual currencies into Philippine money can facilitate payments and remittances.
Cryptocurrency is a type of virtual currency that uses cryptography – a method of storing and transmitting data in unreadable form so that only the intended receivers can read and process it. Bitcoin is the first and most popular cryptocurrency to date introduced in 2009.
Latest data from the central bank showed the volume of bitcoin transactions in the Philippines averaged $8.8 million per month in the first half of last year, more than four times the $2 million per month average in 2015.
The BSP has approved the registration of Betur Inc. and Rebittance Inc. to operate virtual currency exchanges.
There are 30 EMI-banks and 10 EMI-others (non-banks) operating in the country as of end-December. Early this year, the regulator granted licenses to Coins.ph, Wisecard e-money Philippines and Starpay Corp.
Latest data showed e-money transactions rose 11.2 percent to 268 million as of end-September from a year-ago level of 241 million with the value remaining steady at P680 billion.