The Philippines shows sustained animosity towards foreign digital exchanges
The Philippines isn’t as hostile to digital assets as most other countries, but it doesn’t particularly like foreign exchanges. Citing recent debacles in space, Philippine authorities have consistently advised citizens against using foreign-domiciled exchanges.
As part of this movement, the Bangko Sentral ng Pilipinas (BSP) recently released a statement warning the public against patronizing unregistered or foreign Virtual Asset Service Providers (VASPs).
In a press release, the central bank noted that the use of unregistered or foreign currencies could add an additional layer of risks to trading virtual assets, in addition to the dangers these assets pose due to high volatility. .
The BSP mentioned that foreign VASPs might not have the necessary consumer protection structure in place and could be risky for consumers, especially if the company goes bankrupt. He also noted that foreign VASPs can “present an additional challenge in applying legal remedies and redress mechanisms.”
In addition, the central bank highlighted the risks associated with trading or investing in digital assets. He reminded users that neither the bank nor local VASPs could guarantee risk-free investments. Furthermore, he advised users to exercise caution when exploring the digital asset space as this will help identify fraudulent schemes.
The BSP has released a list of registered and approved VASPs containing 19 exchanges, all domiciled in the Philippines. In addition, six of the VASPs are not operational at the time of writing the report.
Philippines considering suspension of VASP license application for 3 years
Unfortunately, Filipinos have 13 options to choose from on local exchanges amid suspension of VASP license issuance.
On August 10, the BSP issued a memorandum notifying the public of the suspension of VASP license applications. According to the memo, licensing will be suspended for three years from September 1, 2022. This gives exchanges seeking to obtain a VASP license less than two weeks to enter the Philippine market.
According to the central bank, this stems from efforts to foster innovation in the financial sector and also mitigate risk. Exchanges that have completed Stage 2 of the licensing process by August 31 will be able to proceed to Stage 3. On the other hand, the bank will close applications for those who did not pass Stage 2.
Currently, Binance is looking to enter the Philippine market as it strives to obtain a VASP license in the country. Two weeks ago, the Philippines Securities and Exchange Commission (SEC) warned the public against dealing with Binance. The SEC noted that the exchange is unregulated in the country.
This came in response to several calls from the Philippine think tank Infrawatch PH to ban the exchange. Nevertheless, Binance expressed optimism about obtaining a VASP license in the country.
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