Benjamin Diokno, governor of the Bangko Sentral ng Pilipinas, stated that the regulatory body would continue to monitor crypto use, especially its potential risk of use in terrorism funding.
Deputy governor Diwa Guinigundo also detailed the limitations of crypto in replacing traditional money as a medium of exchange and store of value. He explained that crypto and blockchain were effective in settlements but they also allowed users to circumvent restrictions by the banking system:
“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.”
Guinigundo said that they encouraged innovation but urged to also run parallel to risk mitigation, and suggested the preference of central banks to maintain oversight of new tech in regulatory sandboxes.
The use of Bitcoin and crypto in the island archipelago has been rising in the past few years, with the central bank’s Technology Risk and Innovation Supervision Department recording USD 390 million in crypto transactions last year, up more than double the USD 189 million recorded in 2017.
These main involved trading between the national currency and other fiat currencies to crypto, but also included incoming remittances from overseas, facilitated through crypto. And they likely do not include other over-the-counter (OTC) trades from peer-to-peer platforms like LocalBitcoins.
According to CoinDance figures, trades on Localbitcoins in the Philippines have been on a steady increase since January, totaling USD 4.3 million in the last week alone.
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