Philippines Central Bank Urges Caution with Cryptocurrencies

Wilfred Michael 

Wilfred Michael

News reporter

11 June 2019,
21:15
Philippines Central Bank Urges Caution with Cryptocurrencies

Benjamin Diokno, Governor of the Bangko Sentral ng Pilipinas (Central Bank of the Philippines), has reportedly warned citizens to be wary of the risks associated with investing in cryptocurrencies.

Precisely, Diokno according to the local news agency, the Star, cited concerns that the new digital tool could serve as a tool for terrorism financing as one of the reasons why it's not suitable for members of the public.

Echoing the same thoughts, BSP Deputy Governor Diwa Guinigundo warned against the use of cryptocurrency, stressing attributes that make cryptocurrencies unsuitable as a replacement for fiat currencies.

Guinigundo pinpointed that he wrote off the use of Bitcoin as a unit of account, medium of exchange, and store of value because of the cryptocurrency's highly volatile value.

Conversely, the top official had kind words for blockchain technology, the underlying system behind cryptocurrencies.

He argued that the system could find broad applications such as becoming useful for payment and settlements for peer-to-peer transactions. He even noted that the technology "could potentially bypass the banks and banking system in general."

To be clear, the latest comments by the  Central Bank leaders comes alongside statistics showing that the volume of cryptocurrency transactions in the Philippines nearly doubled in 2018 despite the bear market.

According to data provided by the Risk and Innovation Supervision Department of the country's Central Bank, the numbers grew to $390.37 million in 2018 from $189.18 million in 2017.

The increasing numbers correspond with the somewhat regulated crypto ecosystem which the country's residents enjoy. In February, we reported that the Philippines, like several other countries, introduced a guideline for security token offerings (STOs).

Meanwhile, other countries to issue warnings to citizens regarding the use of cryptocurrencies in recent times include Malawi and Myanmar.

 

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