Bangko Sentral to regulate virtual currency operators


Posted at Feb 08 2017 03:40 PM

Bangko Sentral to regulate virtual currency operators 1

MANILA - The Bangko Sentral ng Pilipinas said on Wednesday it would start regulating operators of virtual currencies to protect financial consumers and rein in risks like money laundering and terrorism financing.

The central bank's new rules will only cover entities facilitating the conversion or exchange of any virtual currency into fiat currency or vice versa and not virtual currency creators.

"The new regulation seeks to balance the interests of promoting technological innovations ... and proactively address emerging risks to the system arising out of these new technologies," the central bank said in a statement. 

Users of digital currency bitcoin more than doubled in the Philippines in the first half of 2015 from a year earlier, according to the central bank, while virtual currency transactions range from $5 million to $6 million per month for certain major players.

Requirements for remittance companies such as registration, minimum capital, internal controls, regulatory reports and compliance with anti-money laundering laws will be applied to virtual currency exchanges since they are similarly treated as companies offering money or value transfer services. 

The rules will also require virtual currency exchanges to execute a "deed of undertaking" to implement minimum standards of consumer protection. 

Failure to comply with that could result in the cancellation of the operators' certificate of registration, which would bar them from dealing with banks, the central bank said.