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Is the Philippines on the way to becoming a cryptocurrency hub?

The Philippines has finally moved blockchain to the top of its policy agenda. The country’s central bank has seen a massive increase in cryptocurrency adoption over the past few years due to the Covid-19 pandemic.

The prolonged period of isolation has exposed the growing middle class in the Philippines and tech-savvy millennials to the concept of digital tokens through popular blockchain-based games such as Axie Infinity. At one point, 40% of the game’s players, which generated $1.3 billion in revenue last year, were reported to be based in the Philippines.

Similarly, bitcoin trading volumes have reached new heights On some peer-to-peer cryptocurrency exchanges in July of this year. Cryptocurrency transaction volume grew 362% year-over-year to nearly 20 million in the first half of 2021. These transactions were worth 105.93 billion pesosor about 1.82 billion US dollars.

Philippines too Now in second place In the 2022 Global Crypto Adoption Index from Chainalysis – after Vietnam and ahead of Ukraine, India and the United States. According to Chainalysis, the index is “a measure where most people put the largest share of their money into cryptocurrency… the countries where individual and non-professional investors embrace digital assets the most.”

In response to the Philippines’ growing embrace of cryptocurrencies, Banko Sentral ng Pilipinas (BSP) has announced that it will launch a wholesale central bank digital currency (CBDC) project scheduled for the fourth quarter of 2022, noting that crypto may have the potential to improve domestic and cross-border payments and could help In promoting the country’s recovery from the ongoing crisis. This is in line with its goal of converting 50% of payments to digital by 2023.

BSP also started to cooperate with Solution Providers To properly monitor and track financial institutions using blockchain and cryptocurrency in their business, indicating the growing acceptance of blockchain technology in finance as well as the demand to build a better framework.

Blockchain advocates also welcomed the announcement by President Ferdinand Marcos Jr. during his annual address, where he stressed the need to embrace emerging technologies that could eventually pave the way for crypto adoption to expand further soon.

But the path for blockchain and crypto in the Philippines is not entirely clear. Regulators, legislators, and market participants have expressed opposing views. Consensus remains elusive and may remain so until the impact of blockchain and crypto innovation is better understood.

Regulators in the Philippines still consider cryptocurrency to be a virtual asset rather than a legal tender. Starting this month, BSP also has Imposed a moratorium on new virtual asset provider license applications which will last for three years. Understandably, BSP wants to protect the public by ensuring that all crypto companies operating in the Philippines are licensed, but if this continues without proper regulatory clarity, the Philippines could miss out on future projects as companies and investors switch to other, more cryptocurrencies. Industry friendly countries.

Despite these hurdles, the Philippines is well on its way to becoming a new hub for blockchain technology due to the strong support from Filipinos and big companies that are taking the leap and adapting the technology.

We are seeing some of our legislators suggest a technical working group to work on taxing both cryptocurrencies and NFTs (non-fungible tokens). We are also looking at the Pataan initiative, as they are leading it to be the local crypto area.

Another sign that the Philippine authorities are trying to be more welcoming of cryptocurrencies is the project to make the Philippines Cagayan Valley “Crypto Valley of Asia” through a $100 million plan to create a hub for fintech and crypto-related ventures in the region. The project aims to emulate Zug in Switzerland, the birthplace of Ethereum and home to around 200 blockchain companies. Crypto Valley is famous for encouraging, and even allowing, cryptocurrency Blockchain-based electronic voting for the Swiss elections.

Despite the bear market, we are seeing a lot of events and projects happening or about to happen this year. However, there is a gap that must be filled to pave the way to financial sovereignty and opportunity for all.

A holistic approach to targeting the crypto-enabling environment and achieving these hubs is to address the challenge of blockchain: education. Key players should ramp up their gameplay in educating people, including developers and those who will be the champions in pushing this matter within the government in the near future.

Collaboration is also important in ensuring that blockchain and Web3 are being promoted in the right way. Big and small players in the industry should always keep an eye on each other to make sure that they provide real world solutions.

To address the knowledge gap in the field, crypto and blockchain advocates are now educating the ins and outs of digital assets and blockchain in regional languages ​​in the Philippines to help increase financial literacy and protect people from scams.

But ultimately, the key to building the Philippines as the next blockchain hub in Asia will lie in an agile and forward-looking regulatory framework focused on ensuring a level playing field for financial services provided by established financial institutions and start-ups in emerging countries. the system. The seeds are sown, but no seed will become a tree and bear fruit in a few days. As we wait for better weather, transparency and the free flow of information will be essential to ensuring innovation, growth and security.

#Philippines #cryptocurrency #hub

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