Philippines Central Bank Acknowledges The Rising Interest In Cryptocurrencies But Offers Stern Warning About The Risks

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Cryptocurrency News Today – Cryptocurrencies and blockchain technology have been around for the past ten years. Even if this new technology has proven efficient, it hasn’t been able to gain global mainstream adoption, well, at least not as much as it deserves. Following the 2017/2018 Cryptocurrency bull run, there was a surge in the cryptocurrency awareness and it has been rising steadily since then, even after the cryptocurrency winter. Digital asset investors have intensified their search for the best cryptocurrency to invest in 2019. Now, the chief of the Philippines central bank has warned people of the risks attached to the growing use of cryptocurrencies.

Cryptocurrency News Today – Increased Interest In Cryptocurrencies Has Its Demerits

According to a report by the Philippine Star, the governor of the Bangko Sentral ng Pilipinas, Benjamin Diokno, said that his company recognizes the growing interest in cryptocurrencies and would work hard to counter the disadvantage of the use of this new asset class. He cited the potential use of cryptocurrencies in funding terrorism and other illegal activities that would ordinarily be spotted by the traditional financial institutions.

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Regarding this same issues, the deputy governor of the Philippines central bank, Diwa Guinigundo, said that cryptocurrencies have many limitations that do not allow them to be perfect substitutes for fiat money. This, according to him, prevents it from being recognized as a medium of exchange or as a store of value. True, cryptocurrency and the underlying blockchain technology are efficient for settling transactions in the financial system. However, because they allow people to sidestep the banking system, they should not be encouraged. In his words;

“For this reason, game theory dictates possible dysfunction when there is market breakdown, when everyone may distrust one another. There cannot be a total disregard for a central bank or a third party that provides lender of last resort facility.”

According to him, the central bank uses regulatory sandboxes to mitigate the risks attached to emerging technologies. This warning from the central bank is timely as the use of cryptocurrencies within the Philippines has been on a spike for a while now. Between 2017 and 2018, the amount spent on cryptocurrency transactions moved from $189.18 to $390.37. These transactions are a combination of conversions, inbound transactions, and inbound remittance.

Cryptocurrency News – Cryptocurrency Latest Update – Philippines Central Bank Makes Exchange Registration Mandatory

In February, the Philippines central bank issued a circular which mandated all cryptocurrency exchanges within the country to register with them. These exchanges are to register as remittance and transfer companies. They were also expected to implement safeguards to make sure that illicit transactions are stopped and consumer protection is ensured. So far, about ten cryptocurrency exchanges in the country have registered

Even if the central bank didn’t place any ban on cryptocurrencies, it stated that it did not recognize this new asset class as an endorsed commodity. Its only goal is to protect the average investor and make sure that it regulates the tech that delivers financial services.

What do you think about the regulation of cryptocurrencies? Will it curb the illegal use of cryptocurrencies or increase it? Share your thoughts in the comment section below.

Ufuoma Ogono is a cryptocurrency writer with over 3 years experience in the cryptocurrency industry. She dedicates her time to sharing valuable information to members of the cryptocurrency community.

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