The Securities and Exchange Commission (SEC) is eyeing the first half of September to release a draft of new guidelines on virtual currency exchanges (VCE) in the country.
The commission is in a rush to issue a formal regulation by the end of the year as the number of companies seeking to operate as a trading platform for virtual currencies (VC) in the country increases.
“We will put out a draft rule for the virtual currency exchanges hopefully within the first half of September,” SEC Commissioner Ephyro Luis B. Amatong told BusinessWorld reporters after the commission’s en banc meeting last Thursday.
BSP has approved a total of five applications since the issuance of Circular No. 944, a formal regulatory framework for VC exchange operations, last February 2017, where it is stipulated that VC exchanges or businesses engaging in the exchange of pesos to virtual currency or vice versa are required to register with the BSP as remittance and transfer companies.
While Circular 944 governs companies engaging in cryptocurrency to fiat currency exchange, it does not allow them to act as trading platforms. According to Commissioner Amatong, the SEC is in dialogue with the Bangko Sentral ng Pilipinas for joint cooperative oversight over the exchanges who want to act as a trading platform.
The commission is following the footsteps of countries such as Australia, United States and Switzerland in creating guidelines on virtual currency exchanges (VCE).
Last month, the SEC released its proposed initial coin offerings (ICOs) and crowdfunding guidelines, which aims to protect investors and make it easier for small and medium-sized enterprises (SMEs) to raise capital.
“We want to create an environment where investors can feel more or less safe in investing in what are essentially securities that have a digital form… Instead of paper or securities that are housed within PDTC (Philippine Depository & Trust Corp.), the depository [will be] housed on a blockchain,” Commissioner Amatong added.
The country is at the forefront of cryptocurrency regulations alongside with the key players in the industry. Despite precautionary warnings from the local central bank, it still acknowledges the potential of cryptocurrency to revolutionize the delivery of financial services such as payments and remittance due to its ability to provide faster and more economical transfer of funds.