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The Philippine Stock Exchange (PSE) plans to launch a cryptocurrency exchange once it receives a green light from the country’s financial regulator allowing cryptocurrency trading.
According to the PSE, the growing demand for crypto-assets like Bitcoin and Ethereum has made it impossible for the exchange to turn a blind eye to the emerging digital assets class. PSE CEO and President Ramon Monzon said Friday that the local assets exchange marketplace should also be able to facilitate crypto assets exchange. Monzon added that the idea has already been presented to top management a fortnight ago.
“If there should be any exchange for cryptos, it should be done at the PSE. Why? Number one it’s because we have the trading infrastructure. But more importantly, we’ll be able to have investor protection safeguards especially with a product like crypto.”
Philippines: It’s better to Regulate than Ignoring Crypto
Cryptocurrencies have no fundamentals and mostly depend on speculative trading, which makes them attractive due to high market volatility. However, according to Monzon, such a high-risk market should at least be under local supervision.
“A lot of people are attracted to that because of volatility. Instant riches could be instant poverty too…if there’s going to be any structured trading of crypto in the Philippines, it should be under our watch.”
Unfortunately, the PSE alone is not powerful enough to make that decision alone and has to wait for approval from other joint regulators in the country.
“We are not in a position to do that now because we don’t have rules yet from the regulator.”
The PSE is one among several other regulatory authorities including the Philippines Securities and Exchange Commission (SEC), Insurance Commission(Komisyon ng Seguro), Central Bank of the Philippines (Bangko Sentral ng Pilipinas), Philippines Deposit Insurance Corporation (PDIC), Department of Finance(DOF) and the Bureau of Treasury.
Hot for Crypto
The Philippines is one of the world’s fastest cryptocurrency adopters, a trend that especially picked up during the pandemic. Many Filipinos have adopted the value of crypto as investment and income-generating activity, making the country at par in crypto adoption to Nigeria and Vietnam.
As of December 2020, the country had 17 fully regulated cryptocurrency exchanges. According to the CEO and founder of the Philippines Asset and Digital exchange, between December 2020 and March 2021, increased adoption put bitcoin and crypto in a space where even portfolio managers were forced to consider them.
“We are living in interesting times in crypto.”
The country’s central bank also announced its intentions to explore a central bank digital currency one year ago.
While cryptocurrencies have increasingly become popular in the last 4-5 years, regulatory authorities around the world are still slow or unwilling to recognize and regulate them in their jurisdictions. This creates a grey area opportunity for international exchanges like Binance to exploit or rather operate without licensing regulation, and no obligation to report and be taxed by such regulators.