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Philippines Looking Into Regulating Coin Offerings As Use Surges

Philippines Looking Into Regulating Coin Offerings As Use Surges

December 8, 2017

News

Written by Marc Adrian

As the use of cryptocurrency starts to gain grounds in Southeast Asia, the Philippines has deemed it
necessary to regulate the so-called initial coin offerings.

According to the Governor of BSP Nestor Espenilla, central bank is now in talks with the Securities and
Exchange Commission (SEC) on method that will allow them to oversee Initial Coin Offerings (ICOs). In
order to take advantage of the strong growth potential in this space, he noted that companies are
finding ways to facilitate ICOs and act as a central counterparty for the trade in the related coins.

According to Bangko Sentral ng PIlipinas, the use of bitcoin and its counterparts is rising, especially
among OFWs who are sending money back home. This is due to the lower remittance cost and faster
way to transfer their money. As estimated by BSP, bitcoin transactions now reach US$6 million a month –
a rate which is three times more than the volume seen last year.

While US$6 million is just a tiny fraction of what OFWs remits home every month, which is $2 billion, the
rise of bitcoin was big enough to get the attention of the local regulators.
“The SEC is concerned about possible unlicensed investment-taking activity or otherwise selling of
investment contracts in the guise of so-called cryptocurrencies via a so-called initial coin offering,” said
Commissioner Ephyro Amatong in a text message.

Earlier this year, in February, businesses that use digital currencies were asked by BSP to register as
either a remittance company or a money changer so that they could conduct client checks and report
suspicious transactions.

This suggested development by BSP were warmly welcomed by digital-currency firms, but it does not in
any manner endorses any virtual currency as legal tender, store of value, or investment instruments, said
Espenilla.

Governments and regulators around the world are seeking to come to terms with how to treat
cryptocurrencies as their prices soar to fresh records almost daily, contributing to a surge in ICOs over
the past year. Bitcoin, the biggest cryptocurrency by market value, has seen the highest surge in value
this year, which is currently value at US$16,000 at the time of writing.

source: https://www.bloomberg.com/news/articles/2017-12-04/philippines-eyes-rules-for-coin-
offerings-as-bitcoin-use-surges

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What is An Initial Coin Offering?

ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a
new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since
2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can
be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

With the success of Ethereum ICO are more and more used to fund the development of a crypto project
by releasing token which is somehow integrated into the project. With this turn, ICO has become a tool
that could revolutionize not just currency but the whole financial system. ICO token could become the
securities and shares of tomorrow.