By Melissa Luz T. Lopez
NEW digital currency player GOW Exchange is setting its sights on serving big corporates as it enters the Philippine market, as it looks to disrupt traditional finance.
William Sung, GOW co-founder and chief technology officer, said the company sees a huge untapped market to offer virtual currency (VC) for institutional players in the country, as most virtual exchanges currently serve retail transactions.
“If I look at my competitors, they are all looking at trading crypto, the transaction fees on that. I’m looking at institutional players,” Mr. Sung said in an interview with BusinessWorld. “We anticipate strong partnerships…in terms of what services they want from us, and I think that will drive volume liquidity inside the exchange.”
Mr. Sung is a former investment banker in London. Meanwhile, GOW is among the seven virtual currency issuers accredited by the Bangko Sentral ng Pilipinas (BSP) through ETranss Remittance International Corp.
The VC exchange is looking to allow big investors to securitize their assets in the digital space via the GOW platform.
The BSP has stepped up to regulate virtual currency exchanges or firms which convert peso values into e-currency which are then traded online. Meanwhile, the Securities and Exchange Commission has released draft guidelines for initial coin offerings, which will cover firms who issue tokens or digital currencies to raise capital.
Since securing a license in July, Mr. Sung said the firm is now preparing to go live by yearend and open a flagship branch in Manila within the first quarter of 2019. Currently, it has nailed down deals with around five direct partners looking to foray into digital currencies.
He added that big firms can also look at VCs as digital assets to diversify their pool, which he described as a “liquidity bridge.” GOW also has four existing partner-banks to allow corporates to settle and cash in on their VC trades, Mr. Sung added.
“They can see us as a new business for them, and they have clients that we can serve as well. Once banks start to understand our business model – which is not crypto trading – we’re just allowing securitized asset classes in the digital age,” he said.
He said the Philippines has a huge untapped market for VCs, given a young population armed with smartphones while the economy is starting to be a “major player” in the region.
Still, GOW — which stands for Global Overseas Workers — expects strong flows from its remittance business as the use of blockchain has allowed them to reduce transaction costs to just 3-7%, while assuring faster speeds.