About 4.13 million invest in cryptocurrency in the Philippines, according to estimates by Triple A. Latest Statista report shows that the cryptocurrency transaction volume in the country reached 7.2 million (2020, latest) which amounted to 76 billion pesos.
Do you plan to invest in crypto in the Philippines? Should you, would you? Here are five things to keep in mind:
Legitimate exchanges
If you decide to invest in cryptocurrency in the Philippines, the first step to do is find a legitimate cryptocurrency exchange where you can do your transactions or trade your coins. Some of the better-known exchanges in the country are:
- Philippine Digital Asset Exchange (PDAX): Launched in 2018, PDAX is available for website and mobile use. The exchange is regulated by the Central Bank of the Philippines (BSP). Investors can trade coins like Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), etc. on PDAX. Similarly, PDAX can be used to deposit and withdraw assets with direct conversion to Philippine Peso (Php).
- Coins.ph: This exchange allows users to trade cryptocurrency coins like BTC, ETH, Axie Infinity Shards and Smooth Love Potion (SLP). The platform offers free trading and charges Php 10 for withdrawal. It is also regulated by the BSP.
- Juancash: This virtual asset service provider (VASP) gives users a platform to convert fiat money to cryptocurrency and vice versa. The mobile application is available for download on Google Play and Apple Store.
- Bexpress Pro: The trading platform currently has three listed coins: BTC, ETH and USDT. It is working on expanding its coin offerings soon. Bexpress Pro is licensed by the BSP and is affiliated with major banks in the Philippines, such as Union Bank, Landbank of the Philippines, BDO and PNB, among others.
For the complete list of BSP-regulated cryptocurrency exchange platforms in the Philippines, click this link.
Cryptocurrency regulations
In the Philippines, cryptocurrency transactions are legal; however, crypto coins are not considered ‘legal tender’ as they are not issued by the BSP. In 2021, the Central Bank released the Guidelines for VASPs. Under the Guidelines, these are the following key points and information useful for those who’d like to invest in cryptocurrency in the Philippines:
- To run as a money service business, a VASP must apply for a Certificate of Authority from the BSP. During the COA application, the BSP shall evaluate the ultimate beneficial owner of the VASP.
- VASPS must employ efficient cybersecurity framework for digital wallets, data confidentiality and safeguards against cyberattacks.
- VASPS must employ customer due diligence processes to obtain client identification data and avoid potential money laundering and terrorist financing activities.
Furthermore, under the BSP Circular 944, Virtual Currency Exchanges must register to the Central Bank as remittance and transfer companies. The authority also requires them to have systems in place for consumer protection as well as technology risk management.
In 2018, the Securities and Exchange Commission of the Philippines issued an advisory on cloud mining contracts. The SEC defined cloud mining as the ‘process of acquiring cryptocurrency through the utilization of shared mining equipment in … remote data centers’. To be involved in this contract, a user should register and pay an initial fee via fiat or cryptocurrency. According to the SEC, this investment scheme is illegal because it involves security sales to the public, which are not duly registered to the SEC.
Risks when you invest in cryptocurrency in the Philippines
The BSP Circular 1108 series of 2021 states:
The Bangko Sentral recognizes that virtual- asset (VA) systems have the potential to revolutionize the delivery of financial services by providing faster and more economical- means to transfer funds, both domestic and international, and may further support financial inclusion. These benefits, however, should be considered along with the attendant risks in VAs considering the higher degree of anonymity involved, the velocity of transactions, volatility of prices, and global accessibility.
Here are some of the risks that you need to understand when you invest in cryptocurrency in the Philippines, which are also almost the same risks you face when you buy or trade crypto outside the country.
- Price volatility
- Ransomware attacks
- Scams
- Technical glitches
Should you invest in cryptocurrency in the Philippines, you can avoid these risks by using only BSP-regulated exchanges. If you’re a big-ticket player, you may consider investing in a crypto fund administrator in the Philippines to protect your assets and even help diversify your crypto portfolio.
Currently, the Philippines is not seen to have an aggressive attitude towards cryptocurrency investment. Think tank Economist Intelligence Unit (EIU) said the country has a ‘benign approach’ in crypto. But the growth of the digital asset landscape in the Southeast Asian archipelago is watered by cash remittances, which, in 2021 amounted to a record high of USD 31.418 billion. According to the EIU, cryptocurrency wallets are becoming the preferred cash remittance channels. In addition, the EIU says:
‘In the medium term, we expect the authorities to promote cryptocurrency use cases with supportive policies, through government initiatives. That said, we do not expect cryptocurrency to become the prevailing method of payment in the Philippines in the long run, as it is unlikely to be accorded legal tender status.’
Want to invest in cryptocurrency in the Philippines? We can help you!
As a global fund administrator, Bolder Group knows the cryptocurrency game in its areas of business, including the Philippines. Our professionals are highly experienced in frequency trading, indexing and arbitrage. We can help you launch and administrate a crypto fund and in your legal compliance needs.
If you wish to invest in cryptocurrency in the Philippines, it’s best to speak to an expert. Reach out to us today.
