As reported, the Philippine central bank (Bangko Sentral ng Philipinas) (“BSP”) has approved applications filed by two cryptocurrency exchange platforms to facilitate the conversion of Philippine pesos (“Pesos”) into cryptocurrencies. There are now five BSP-approved cryptocurrency exchanges operating in the Philippines. This development is undoubtedly a positive for cryptocurrency adoption in the Philippines and total Peso-to-crypto conversion volume is substantial, with around US$38 million worth of Pesos being exchanged into crypto per month in late 2017.
Although cryptocurrency exchanges in the Philippines must register with the Philippine Anti-Money Laundering Council and report covered and suspicious transactions, it would still clearly be difficult for regulatory authorities to account for transactions from these exchanges to privately held wallets. This may account for why the BSP has imposed regulations so that single transaction payouts greater than approximately US$9,000 can only be made by “check payment or direct credit to deposit accounts”.
In the Philippines, approval to operate as a cryptocurrency exchange platform as regulated by BSP Circular No. 944, is different to being registered as an “e-money issuer”, which would instead fall under BSP Circular No. 942. This difference is noteworthy since e-money issuer regulations impose minimum capital requirements of around US$1.9m on e-money issuer entities and also impose a monthly load limit of around US$1900 without BSP approval.
