Philippine Central Bank Warns of Risks of Increasing Cryptocurrency Adoption

Asia Blockchain Review
July 2, 2019

Bangko Sentral ng Pilipinas (BSP) has said it will continue addressing the risks brought about by the growing use of digital currencies in the country.

As reported by the Philippines Star, BSP Governor Benjamin Diokno stated that he is not fully convinced about the use of cryptocurrencies in the country, expressing concern over its potential abuse for terrorism financing. 

Central Bank Skeptical of Crypto as Legal Tender

Additionally, the BSP Deputy Governor Diwa Guinigundo spoke of the limitations of cryptocurrencies as a substitute for fiat money, as a medium of exchange, and as a store of value.

Guinigundo said that while blockchain technology and cryptocurrencies can be useful, they effectively allow users to sidestep the conventional banking system.

“For this reason, game theory dictates possible dysfunction when there is a market breakdown, when everyone may distrust one another. There cannot be a total disregard for a central bank or a third party that provides lender of last resort facility,” the BSP Deputy Governor said.

Warning Comes Amid Rising Crypto Use in Southeast Asia

The warning by the BSP appears to be the result of rising cryptocurrency usage in the Philippines. The PhilStar previously stated that transacting through online currencies in Southeast Asian countries nearly doubled from US$189.18 million in 2017 to US$390.37 million last year, according to data compiled by the central bank’s Technology Risk and Innovation Supervision Department.

In response to the Southeast Asian country’s rapidly increasing reliance on cryptocurrencies, the BSP in February 2017 released a circular authorizing cryptocurrency interchanges to register with the central bank as remittance and transfer companies.

Guinigundo also said that the central bank prefers to employ regulatory sandboxes to keep control of breakthrough technologies, in order to avoid discouraging innovation while mitigating these risks.


About Asia Blockchain Review

Asia Blockchain Review is the largest initiative for media and community building in Asia for blockchain technology. It aims to connect all blockchain enthusiasts on a regional scale and facilitate the technological foundation of blockchain through a range of group discussions, technical workshops, conferences, and consulting programs.

Our goal is to cultivate and encourage a collaborative community for our members to gather, share their experiences and endeavors in the blockchain space, and brainstorm the potential uses of blockchain technology.

Follow Asia Blockchain Review on:

Related Article
Blockchain: Fine-tuning the Music Industry
Music might be in need of another tech disruption in the form of blockchain.

July 17, 2019

Graph Blockchain Secures Contract with South Korean Transport Ministry
The pilot project is for storing traffic data on a blockchain network as part of the Smart City nati...

July 13, 2019

Hong Kong, a Great Place for Blockchain Startups
It is quite evident that Hong Kong is quite rapidly developing to be a blockchain hub in the region ...

July 12, 2019

We provide information about Asia Blockchain Review latest activities as well as global blockchain news and research. Subscribe to our Newsletter now or Contact us