The Bangko Sentral ng Pilipinas, the country’s central bank, is the navigator that steers the country’s financial system. Over the last 12 months, amid a global monetary crisis and economic certainty, the BSP initiated a series of measures, including rate cuts and COVID-19 relief policies which, among other things, included the instruction to banks to delay credit card and debt payments while the entire country was under enhanced community quarantine (ECQ).
But the mandate of the BSP could only extend as far. While it can encourage banks to waive ATM fees, it cannot impose them to actually do so (and now we’re reading about the possibility of increased ATM fees). While the BSP announced interest rate cuts to encourage people to borrow from the bank, thereby increasing spending necessary to jolt the economy, it falls upon the banks themselves if they will actually allow increased lending or not.
All of this, while it proceeds with its goals to digitize the country’s payments. From the National QR Code Standard to the establishment of “Digital Bank” as a bank category, the central bank has had a very busy 2020.
Table of Contents.
BSP’s Crypto 2020
Alongside the Securities and Exchange Commission, no other organization has more influence on the cryptocurrency industry in the Philippines than the Bangko Sentral ng Pilipinas. From financial sandboxes that allowed crypto companies to operate and innovate, to guidelines for virtual currency exchanges, the Central Bank’s support is critical if the crypto industry is to thrive in the Philippines.
Most recently, the BSP released its updated Guidelines for Virtual Asset Service Providers (VASPs), which is now more aligned with the recommendations from the Financial Action Task Force (FATF), the global standard-setting body for anti-money laundering rules and regulations.
The new guideline has updated its requirements for setting up crypto companies and provided classifications for more types of cryptocurrency companies. This is in contrast with the previous Circular No. 944, which appears to only include cryptocurrency exchanges at face value.
In this exclusive interview, BitPinas discussed with the BSP its position on cryptocurrencies, on the insights it gathered from the currently-licensed virtual currency exchanges, and whether or not it is open to more international crypto companies registering in the Philippines.
What is the BSP’s position with respect to virtual currencies or cryptocurrencies? Would it be safe for the public to engage in the cryptocurrency market?
BSP: The BSP views virtual currencies, in particular the technology behind it, as having potential to transform the provision of financial services. However, we are also cognizant of the risks it poses to the integrity and stability of the financial system, as well as to consumers who may be less informed about how virtual currencies work. In February 2017, we issued BSP Circular No. 944 to require licensing for Virtual Currency Exchanges (VCE) – the points where virtual currencies are exchanged to fiat money – to ensure that they operate safely and soundly; they are not used as channels for money laundering, fraud and scams; and they provide their clients with appropriate avenues for redress in case of concerns about VCE services. The BSP has issued public advisories to encourage the public to deal only with BSP-registered VCEs, and to be mindful of the risks of using virtual currencies.
We also remind the public that the BSP does not, in any way, endorse virtual currencies as legal tender, store of value, or investment vehicle. The BSP wants consumers to understand that investing in virtual currencies, due to its volatility, presents enormous risks which might result in financial losses, and there is no guarantee for recovery nor recourse. Hence, a consumer engaged in such activities should be fully prepared to protect his/her accounts and minimize risks by maintaining only a sufficient amount of virtual currencies to address transaction requirements, ensure confidentiality of personal information and transaction details, secure virtual currency-related email accounts, observe basic internet security, and use multi-factor authentication.
How does the regulatory sandbox for fintech and crypto companies help in the growth of the industry especially in 2020 and beyond?
Our sandbox, or “test-and-learn” approach as we love to call it, is primarily a collaborative undertaking between us the regulators and applicants, whether newcomers or incumbent institutions. Having this at our disposal enables us to welcome and sit down with applicants to ensure that only responsible financial innovations will be allowed to be deployed in production. In the course of these activities, coupled with our continuing surveillance of the digital financial landscape, we are often able to recognize areas of the regulatory framework which needs to be updated.
Based on lessons learned, and in-depth industry consultations, we are now expanding the VCE regulations to cover even wider virtual asset service provider (VASP) business models. The circular that will replace the 2017 issuance was approved by the Monetary Board on 21 January 2021. The new policy framework expanded VCE activities, subject to the licensing regime of the BSP – from initially covering those involved in facilitating the exchange of fiat and virtual currencies or virtual assets (VA) – to include the exchange between one or more forms of VAs; transfer of VAs; and safekeeping and/or administration of VAs or instruments enabling control over VAs. All transactions involving the transfer of VA shall be treated as cross-border wire transfer and that VASPs are expected to comply with corresponding BSP rules governing wire transfer, particularly on the obligation to provide immediate and secure transmittal of originator and beneficiary information from one VASP to another for certain transactions.
All VASPs shall be subject to the BSP’s licensing requirements and regulatory expectations for money service businesses (MSB), as well as consumer protection, anti-money laundering, countering the financing of terrorism and proliferation financing (AML/CFT/PF) obligations. This new circular is aligned with fintech industry’s best practices and consistent with risk management standards set by international standard-setting bodies such as the Financial Action Task Force (FATF) on AML/CFT/PF.
Moving forward, we are looking to adopt an open finance framework which espouses consent driven sharing of permissioned data between financial institutions and third-party providers. These, along with other initiatives, make us confident that the country’s regulatory landscape will remain ready to support innovations in financial services while retaining sufficient safeguards to protect consumers and all stakeholders.
What insights does the BSP have from data gathered from VCE companies this year?
Among the areas that we wish to highlight this year are some insights gathered from a COVID-19 pandemic impact survey that we have conducted with VCEs and other key FinTech players during the early second half of 2020. On a strategic aspect, VCE respondents emphasized the need to rethink their strategic direction and have considered pursuing digitization initiatives that are more suitable to the new normal. At the operational level, VCE respondents expressed that they are well-positioned to handle issues with respect to information security, money laundering, consumer protection, and critical third-party service providers, while the pandemic has also refocused their efforts towards strengthening their business continuity framework and succession planning to minimize or avoid operational disruptions. VCE respondents also cited positive insights in terms of digital transformation developments, as the pandemic situation has served as an added push for VCEs to integrate their digital initiatives in their business roadmap. All in all, the survey has served as a vital supplement to BSP’s ongoing surveillance of COVID-19 concerns to the VCE industry, while also affirming the benefits reaped from an enabling regulatory environment, as shown in the continuous rise of VCE activities as well as a robust and resilient core IT infrastructure and cybersecurity landscape.
The BSP had been building momentum in 2019, how would you say they responded to the operational challenges of 2020?
We are very fortunate that the BSP has, over the past years, laid down solid infrastructural and procedural foundations that helped us hurdle the challenges brought upon by this pandemic. Amid the mobility constraints, we are able to continue servicing the needs of our stakeholders utilizing digital channels for submissions as well as video conferencing for matters requiring in depth discussions. Leveraging on this approach to complement existing methodologies, the BSP, through its Technology Risk and Innovation Supervision Department (TRISD), was able to process 8 new non-bank EMIs, 2 non-bank e-money issuers (EMIs) with VCE services and 3 VCEs. Another existing EMI was also granted authority to offer VCE. To date, we have 27 non-bank EMIs and 16 VCEs; 4 of which offer both EMI and VCE services.
The BSP is often recognized globally for its VCE leadership. What advice would you have for other jurisdictions?
It might sound cliché, but adopting a digital mindset is a critical first step. As regulators, we are somewhat wired to be quite skeptic on new technology-centric business models given the plethora of risks that we are constantly trying to manage while pursuing our mandates. This is where the commitment to be open-minded in understanding and removing preconceptions on certain technology implementations go a long way for crafting the most suitable regulatory framework for industries such as the VASPs.
What is the key benefit that you see for international crypto companies looking to register in the Philippines?
Earning and maintaining trust of all stakeholders is critical for the success of any financial undertaking. International VASPs who are willing to undergo BSP’s registration procedures will help us build our institutional understanding of their business as well as the management behind their operations. They in turn will better be guided and informed on how to meet our regulatory expectations and comply with established standards. Naturally, if they can secure BSP registration, customers in the country will be more willing to engage them, given the inherent trust that they place on BSP-registered entities.
This article is first published on BitPinas: Bangko Sentral ng Pilipinas | 2020 Year in Review
Unlike Dogecoin, Catecoin Gives a New Meaning to Meme Coins with Real Use case
In the present-day connected world, memes have become an integral part of our pop culture. While one can’t put a monetary value on the entertainment they provide, its creators can definitely be encouraged and rewarded for their contribution towards a lively internet.
Catecoin, the first decentralized meme-based token is trying to do just by incentivizing content creators as well as consumers. The project is the first of its kind to implement DeFi features in the content space. Fueled by the CATE token, the project offers a platform for user-generated content, quite similar to 9GAG but on a blockchain, along with content farming and staking features.
How does it work?
Using the Catecoin ecosystem is as simple as using any social network platform. Content creators can submit their creations to the Catecoin Meme Platform and once published they will start earning CATE rewards as the community likes or comments on that content. Even platform users who interact with the posts will receive rewards for their comments and likes.
Meanwhile, the posts are evaluated based on the received reactions. Any post with 500 or more likes from the community will become eligible for a transformation into an NFT and get listed on the NFT market. Catecoin refers to this entire process as Content Farming and has set aside 35% of CATE supply for this alone.
CATE is the utility token of the Binance Smart Chain-based Catecoin project. Apart from value exchange, these tokens also control the accessibility of the platform. Users should hold a minimum of 10,000 CATE to interact with any posts on the platform. Similarly, content creators will have to maintain a balance of 100,000 CATE to be able to submit their works to the platform.
While each like or comment will result in both content creators and consumers receiving 0.1 CATE each, the community can also earn additional returns by just holding the tokens. The platform shares one percent of each transaction made on the network with CATE holders, and at the same time burns the same amount to regulate supply.
Once a meme gets converted to NFT and lists on the NFT market, anyone can purchase it and start receiving any rewards the asset may generate in the future.
Get some CATE, it is simple
In just a few simple steps, one can become part of the Catecoin community early on. CATE is listed on PancakeSwap and users can acquire the tokens against BNB payment. Buying CATE will require users to download and set up Trust Wallet and MetaMask accounts and hold some BNB in their wallets. They can then visit PancakeSwap, make payment in BNB to the Catecoin token 0x118f073796821da3e9901061b05c0b36377b877e and receive the tokens in their connected wallet.
— CateCoin (@cateclub) May 13, 2021
What Makes CATE Different?
The flood of meme coins into the crypto market started long ago, and Dogecoin is the prime example. Many of these coins have a virtually unlimited supply and no real use cases. On the other hand, CATE has a definite supply of 100 trillion and a deflationary mechanism that reduces the supply by 0.5%-1% per transaction while providing a real-world use case – encouraging meme creators to monetize their content. The model adopted by Catecoin makes it the most sustainable meme project out there.
Developed by Traders for Traders, QoinIQ Platform Opens IEO on ProBit Exchange
QIQ, the utility token for the QoinSuit ecosystem, officially launched IEO May 17, 2021, on ProBit exchange. QoinIQ offers an unmatched trading experience with their QoinSuit application, augmenting trading processes and alleviating user risk.
QoinSuit elevates the typical trading experience with a broad overview of markets, extended conditional order functionality, and decentralized order management.
QoinIQ’s unique value proposition lies with its functionalities that address key market demands starting with an attractive, fully customizable trading layout optimized for multi-screen displays. Traders leveraging the newly developed trading display can operate in numerous cryptocurrencies simultaneously, bolstering data visibility in a field where seconds are money. QoinIQ’s “playground” offers an avenue for new users to acclimate to both QoinSuit’s trading interface and cryptocurrency trading as a whole, at no risk to the user.
QoinIQ will roll out new features on an ongoing basis to meet user wants and industry trends. First in the pipe during the 2nd cycle are “function-specific technical support” additions and “opinion crowdsourcing” capabilities. In addition to these upgrades, QoinIQ will launch numerous chart and display evolutions, enhanced chart trading functionality for technical analysis patterns, and a community forum and “follow top traders” list to build a stronger community.
QoinIQ utility tokens (QIQ) enable users to access QoinSuit and its services based on membership levels determined by total token commitment and lockup period length. Users can receive higher fee discounts if they subscribe to extended subscription periods. QoinIQ employs a conservative asset allocation, with less than 3% of total QIQ given to administrators and 39% invested into development and overhead costs.
Founded by a team with decades of experience in the financial markets, including cryptocurrency trading and arbitrage, QoinIQ is striving to set a precedent. Their frictionless trading experience and their commitment to adapt their platform and services to changing market conditions paint them in a favourable light for future proliferation.
ABOUT PROBIT EXCHANGE
ProBit Exchange is a Top 20 crypto exchange globally. We have completed over 200 rounds of IEO and have been consistently ranked Top 4 in Korea. ProBit Exchange provides unlimited trading access highlighted by over 1,000 trading pairs.
ABOUT QIQ TOKEN
QIQ is the utility token for the QoinIQ ecosystem and currently serves numerous uses in their QoinSuit trading application. 60% of the total token pool will be sold during the token generating event, while QoinIQ will invest the remaining 40% in future developments. CoinIQ may burn 5% of the free float of tokens depending upon the development track of QoinSuit.
PROBIT EXCHANGE’S GLOBAL BRAND TRUSTED BY MILLIONS OF USERS
100,000+ community members
1,000,000+ monthly active users
3,000,000 monthly web visitors
50,000,000 users on partnering aggregators and wallets such as CoinMarketCap
User interface of Multilingual website supporting 41 different languages
Marketing and community support in 8 key languages
Why Get PROB this May?
- Instant event access to ProBit Exclusive Manic NFT MAYhem!
- Join ProBit Cup with 20,000 USDT in prizes!
- Move up to at least VIP 2 and get bonus PROB tokens.
- Receive free Netflix subscription in USDT just by moving to VIP 3 or above.
- Be eligible for Trading Competitions just by staking PROB.
- Get higher IEO bonuses with PROB purchases.
- Lower trading fees to 0.03% by paying with PROB.
- Stake PROB and earn PROB at a rate of 4% per annum.
- Earn 10-30% of trading fees by referring friends to ProBit.
- PROB Reserves improve the ProBit Exchange ecosystem and provide maximum value for PROB holders.
ProBit Global: www.probit.com
ProBit Korea: www.probit.kr
ProBit Telegram: https://t.me/ProbitEnglish
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