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Regulation

New Cryptocurrency Regulations Effective in Philippines Now

Maya Mandzikasvili | Feb. 6, 2019
New Cryptocurrency Regulations Effective in Philippines Now

February 6, 2019, | AtoZ Markets - Recently the Philippines announced about the new rules for managing cryptocurrencies, which cover areas related to the acquisition of cryptocurrencies, including utility and security tokens. The announcement was delivered by the administration of the Cagayan Economic Zone (Ceza), a state regulator.

What is the main purpose of the new rules?

Ceza, the governmental corporation tasked to manage and supervise the development of the Cagayan Special Economic Zone and Freeport explained in its report the importance of the new rules. The government-owned authority noted, that the goal is to effectively regulate the crypto industry while protecting the interests of investors and promoting innovation.

According to a Vietnamese English daily newspaper, in accordance with the new regulations for offering digital asset markers (Dato), the creators of all crypto active assets for initial coin offers should provide clear offers containing relevant information about the issuer, the project and related recommendations and certification of experts.

The token, as stated in the new rules, must be listed on the licensed Offshore Virtual Currency Exchange (OVCE), a special exchange for this.

Participants according to the regulator, must have confirmed agreements with Ceza accredited providers and purse keepers.

The cryptos acquisition rules adopted by the Philippines were divided into three levels of digital asset offerings:

  • the first level,tier one for the assets and investments not exceeding $ 5 million with payment made in digital tokens
  • tier two digital assets with investments range between $6M to $10M
  • tier three digital assets with investments exceeding $10 million.

The new rules will protect investors

Raul Lambino, CEO Ceza, said that the structure of Dato is not aimed at holding the growth of the cryptocurrency values but as the investors' protection and promotion of the innovations.

The head of the Philippine cryptocurrency regulator emphasized that the organization is “committed to providing "a clear set of rules and guidelines that will stimulate innovation, as well as ensure proper compliance by participants in the ecosystem."  

Lambino expressed his hope, in the new set of regulatory innovations, that will contribute to “the introduction of blockchain and cryptography by institutional investors and the financial system.”

Ceza and Abaca team up to moderate the new cryptocurrency rules

The Philippines governmental regulator explained that they will work in partnership with the Asian Blockchain and Cryptocurrency Association (Abaca). Abaca is a representative of the self-regulated industry, whose responsibilities include the implementation and enforcement of rules. The organization Abaca will also inspect whether the members of the new agreement follow the new rules reporting to Ceza on any violations related to the rules for exchanging virtual currency in offshore zones.

Discussing the cooperation of CEZA in Abaca Lambino explained that the “guarantees embedded in the rules and system of Ceza will lead to greater investor protection and transparency.” DA agents and experts as neutral third parties “will help to ensure the truth and accuracy of the issuers,” added Ceza CEO.

Ceza today authorized 19 companies that work with cryptocurrency exchanges in the development of the financial technology economic zone. The regulator also pointed out that the new rules will encourage innovators to make responsible use of new technologies. Ceza stressed that working with local fintech firms and industry players will help the government get insights and stay aware of innovations in emerging markets.

Cryptocurrencies on the governmental radar

Juanita Cueto, chairman of Abaca, said: “The SRO model allows industry players to control their ranks while simultaneously promoting and protecting the interests of investors in cryptocurrency. The rules will remain strict in assessing the ethics and integrity of companies preparing to issue offers of digital assets. ”

All over the world, government agencies are focused on cryptocurrency, not only because of the taxation issues but also due to the mandatory registration and full disclosure rules.

This new wave of regulation creates a contradiction, given that confidentiality and autonomy are traditionally among the strongest characteristics of cryptocurrency. Some regions that have recently used their jurisprudence textbooks to measure aspects of virtual currencies include Malaysia, Australia, Japan, the EU, and the United States.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.