BSP cautions public on bitcoin ATMs, approves 11th VC exchange

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has cautioned the public against operators of automated teller machines (ATMs) and online platforms handling virtual currency (VC) transactions, particularly bitcoin.

In a public advisory, the BSP said it has not authorized any individual or entity to install VC ATMs in any location in the Philippines or manage online platforms for VC transactions.

The regulator said operators of ATMs that allow purchase or exchange of VCs such as bitcoins must register with the BSP as VC exchanges under Circular 944 issued in February 2017.

“Since VCEs facilitate the conversion of VCs to fiat currency or vice-versa, they must comply with anti-money laundering or terrorist financing regulations, appropriately manage technology and operational risks, and ensure adequate consumer protection and customer support,” the BSP said.

It added VC users should only deal with BSP-registered VCEs and maintain a sufficient amount of VC to cover transactional requirements.

“The public is reminded that the BSP does not endorse any type of VC or cryptocurrency as legal tender, store of value or investment instrument,” it said.

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.

Meanwhile, the BSP’s Monetary Board approved the registration of Bitan MoneyTech Co. Ltd. Inc. as a VC exchange. This is the 11th VC exchange approved by the regulator.

The other VC exchanges are Bexpress, Coinville Phils., ABA Global Phils., Betur (Coins.ph), Rebittance, BloomSolutions, Virtual Currency Philippines, ETranss  Remittance International, Fyntegrate and ZyBi Tech.

BSP Governor Benjamin Diokno had said the regulator would continue to address the risks brought about by the growing use of virtual or cryptocurrencies in the country.

Diokno is not fully convinced about the use of cryptocurrencies in the country since this could be used for terrorism financing.

Latest data from the BSP’s Technology Risk and Innovation Supervision Department showed the value of transactions involving virtual currencies almost doubled to $390.37 million last year from $189.18 million in 2017.