Virtual currency transactions in the Philippines doubled their value in 2018.
According to a report by Philippine Daily Star, such transactions reached $390.37 million in 2018 which is double the value as compared to $189.18 million recorded in the previous year.
This mirrors the findings of US-funded multimedia agency Voices of America which showed support for cryptocurrency exchanges in the Philippines did not waver despite a volatile 2018.
In an interview with Philippine Daily Star, Bangko Sentral ng Pilipinas (BSP) Technology Risk and Innovation Supervision Department officer-in-charge Melchor Plabasan explained “the trends in the buying and selling of cryptocurrencies actually reflect the way investors and users naturally behave.”
“Small to medium crypto players tend to sell as soon as target profits are met (2017) while large value players hold longer but will immediately sell to secure their gains or protect their holdings when triggered by events such as the sudden decline in 2018,” Plabasan said.
Plabasan went on to say that the buying behavior can be attributed to the “growing popularity of cryptocurrencies and the speculative attitude of some crypto investors hoping to capitalize on the next rise of crypto prices.”
Plabasan revealed in the same interview that transactions were mostly virtual currency to fiat money (Philippine Peso) conversion and vice versa as well as international inward remittances using digital assets as leverage.
In an attempt to provide a degree of protection for Filipinos and Philippine entities when making virtual currency transactions, BSP released Circular 944 which essentially is a regulatory framework for virtual currency exchanges (VCEs).
BSP defines virtual currency (VC) as a general term that covers different types depending on business model—centralized (e.g. one entity/individual issues the VC); decentralized (e.g. no central repository or administrator but several entities/individuals maintain the VC); convertible (e.g. the VCs can be exchanged to fiat currency and vice versa); or cryptocurrencies.
Cryptocurrency, meanwhile, is defined by BSP as a type of VC that uses cryptography—a method of storing and transmitting data in unreadable form so that only the intended receivers can read and
process it. This allows cryptocurrency transactions to be carried out in a decentralized manner by a group of users.
Finally, BSP defines VCEs as companies or businesses engaged in changing VCs into fiat currency (and vice versa). The act of converting VCs into Philippine money can facilitate payments and remittances.
Despite BSP granting more licenses to VCEs to operate in the Philippines, it continues to caution the public on the “acquisition, possession, and trading of virtual currencies, particularly bitcoins.”
It outlined important security considerations for those who engage in virtual currency transactions in its advisory on VC use released in 2017.
Among its suggestions are using two or more digital wallets for virtual currency transactions and adding layers of authentication when utilizing a digital wallet.
For the complete list of said security considerations, click here.