The Philippines’ central bank has been working on crypto education and protection initiatives in response to the country’s growing cryptocurrency market.
The Bangko Sentral ng Pilipinas (BSP), the country’s central bank, has been actively working to increase cryptocurrency education in light of the numerous advantages brought about by blockchain technology and the cryptocurrency market.
Cointelegraph is a crypto news outlet, and a representative from the BSP recently stated that the central bank is interested in utilizing the capabilities of cryptocurrencies to enhance the country’s financial sector, particularly in the areas of remittances and payment services, as reported by the outlet. It’s possible that cryptocurrencies could make money transfers more efficient and less expensive.
Acceptance of Cryptocurrency in the Philippines
BSP data showed that the country’s use of cryptocurrencies grew in the wake of the global epidemic and record trading volumes for Bitcoin and other cryptocurrencies.
When asked about plans to restrict crypto trading or investments in light of their rising popularity, a BSP representative assured the press that the bureau instead plans to implement a regulatory framework that creates a more conducive atmosphere for the sector.
Despite the BSP’s efforts to foster a favorable climate, the country’s central bank maintains a dim view of cryptocurrency payments. The bank rightly pointed out that crypto assets lacked the intrinsic value to be used as legal tender because their value was derived from the consensus of users in the community.
In addition, cryptocurrencies cannot be used as a form of payment because of the dangers associated with them, such as their unpredictability, the possibility of their use in illegal activities, and the high susceptibility to fraud resulting from their high degree of anonymity and weak digital security protocols. In addition to the previously mentioned dangers, there is also the possibility that crypto transactions cannot be undone. This would mean that there is no governing body that can restore funds or undo transactions.
The central bank of the Philippines warned that virtual currencies like bitcoin are not treated as currency but as virtual assets. The BSP has warned that users may incur losses in the cryptocurrency market due to the high degree to which its prices are influenced by speculation. As part of Circular No. 1108, published in January 2021, the BSP issued a guideline for all companies offering services related to virtual assets as a means of addressing this issue.
Despite these obstacles, the BSP is still thinking about adopting blockchain technology to boost the Philippines’ financial sector’s productivity and safety. There are plans afoot for the central bank to launch its own digital currency.