By Elijah Joseph C. Tubayan, Reporter
CENTRAL BANKS around the world are discussing the possibility of issuing its own cryptocurrencies, but Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla, Jr. says the Philippines is not there yet.
“There’s a new thinking now that central banks itself creating its own cryptocurrency – that one is a concept that was actually discussed in recent annual meetings that I have attended in Washington DC. This has been discussed at the highest levels of financial regulatory community,” Mr. Espenilla told reporters on the sidelines of the 12th Asset Philippine Forum on Tuesday.
Mr. Espenilla attended the International Monetary Fund-World Bank Annual Meetings in Washington, DC., earlier this month.
“Cryptocurrencies are being created outside of government. That is why it is attractive because government hands are not behind it,” he added.
Asked about the BSP’s stance on the issue, Mr. Espenilla said: “There’s a lot of experimentation going on in some countries. We’d like to see first how that works.”
While there are risks in virtual currencies, the BSP has acknowledged its benefits, such as creating an efficient money transfer service.
The BSP cannot regulate the cryptocurrency, such as bitcoin, given its global, virtual form, but can intervene on its exchanges.
In February, the central bank set rules that all platforms converting digital currencies to cash must be accredited by the regulator, and must adhere to existing rules imposed on remittance agents, including the reporting of potential dirty money transactions.
They should likewise adopt internal controls for risk management and cybersecurity, similar to those required of banks and other financial firms.
“So in a way it’s cautious but it’s also not prohibiting,” said Mr. Espenilla.
“We also realize pragmatically that even as we talk, it grows, whether or not we like it. So rather than prohibit something that is very hard to prohibit anyway, we chose to engage and the industry has accepted that engagement to the BSP,” he added.
A bitcoin is a form of easily transferable electronic currency not issued or guaranteed by a central bank that is used for paying goods sold through the Internet, which sometimes stands as an investment for its holders given its fluctuating valuations. It is a form of digital money that is, and can be sent or received by anonymous users internationally.
“If you want to use these things as payments, you don’t want it volatile. People must be able to pay cryptocurrency and should get the equivalent of one. It’s not something that bloats and could change because the transaction itself is not an investment, it is a payment. That’s kind of things that still need to be sorted out,” Mr. Espenilla said, noting technical and operational issues continue to persist.
“In a way, is promising and interesting but there are still many issues… In my mind, it’s too soon to move in that kind of direction.”
Under the law, the BSP is the sole authority that can issue money in the Philippines through bank notes and coins used as legal tender for day-to-day transactions.