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richmondflores
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philippine banks regulates the use of bitcoin

Wed Feb 01, 2017 2:25 am

What will be the outcome of this is it good or bad for filipino bitcoiners.

BSP regulates bitcoin usage
The Bangko Sentral ng Pilipinas (BSP) will now regulate the fast growing but potentially risky bitcoin industry in the Philippines as it continues to combat money laundering and other terrorist financing schemes. In an interview with The
STAR, BSP Deputy Governor Nestor A. Espenilla Jr. said the Monetary Board has already approved the circular regulating bitcoin entities.
“They would now need to register as a money transfer business. At some point, if they are not registered with the BSP, no bank will deal with them,” Espenilla said over the weekend.
The BSP expects to release the circular this week after getting the nod of the policymaking Monetary Board on the proposed regulation two weeks ago.
“We are doing this because it might be a venue for money laundering and since it is electronic, it may be hacked so we are regulating the virtual currency exchange,” Espenilla said.
In industry parlance, the so-called bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds.
Espenilla said the bitcoin market is already growing in the Philippines with Filipinos using this channel to send or receive dollar remittances from abroad.
“Volume is growing. We conducted a survey last year among just the top two players. The volume grew $5 to $6 million a month compared to $2 to $3 million the previous year. It doubled. There was an acceleration. Based on that, we decided to put this on a formal regulatory framework. Right now, it’s not regulated,” Espenilla said.
The BSP has been issuing advisories on the use of bitcoins but Espenilla said it is now necessary to regulate it because it has the potential to grow big.
“You cannot ignore it anymore because it’s a growing channel. In the overall scheme of things, it’s not yet that big but it has a potential to grow,” he said.
Espenilla said virtual currency is also commonly used in the underworld – for the drug trade, ransom activities and terrorist financing operations.
Customers can buy and sell bitcoins through dealers or brokers or going through webbased bitcoin exchanges that enable holders to directly buy and sell the virtual currency.
As early as 2014, the BSP has already warned the public against the use of digital currencies.
Monetary authorities have been plugging loopholes in the financial system that may pave the way for money laundering activities after some $81 million in funds stoalen by hackers from the Bangladesh central bank found its way into the Philippine banking system.

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