Philippines Central Bank Warns on Perils of Growing Cryptocurrency Use

The website CoinDesk.com published news about a warning from Philippines Central Bank about risks of excessive cryptocurrency usage. Now, let’s check what is happening:

The Philippines central bank has cautioned within the perils of growing cryptocurrency use in the United States. On Monday, The Philippine Star quoted Benjamin Diokno, governor of the Bangko Sentral ng Pilipinas, as saying his institution would still address using cryptocurrencies, especially because of the tech’s potential use within the funding of terrorism.


The central bank’s deputy governor, Diwa Guinigundo, also spoke of cryptocurrency’s limitations as an alternative for fiat money, like a medium of exchange and actual value.


And, while cryptos and blockchain could be helpful for settlement, they effectively allow users to sidestep the banking system.


Guinigundo stated:



“For this reason, game theory dictates possible disorder when there’s market breakdown, when everybody may distrust each other. There can’t be a complete disregard for any central bank or a 3rd party that gives loan provider of last measure facility.”


To balance encouraging innovation with risk minimization, the central bank would rather use regulatory sandboxes to help keep oversight of these technology, Guinigundo stated.


The central bank execs’ warning may come as utilization of cryptocurrencies within the Philippines still rise. The PhilStar formerly reported that virtual currency transactions within the Southeast Asian nation almost bending from $189.18 million in 2017 to $390.37 million this past year, according to data published by the central bank’s Technology Risk and Innovation Supervision Department.


Individuals transactions within the Philippines include conversions from Philippines pesos along with other fiat currencies to cryptocurrencies and the other way around, in addition to inbound worldwide remittances facilitated through cryptocurrencies.


As a result of the boost in use, the central bank in Feb 2017 issued a circular mandating cryptocurrency exchanges to join up using the central bank as remittance and transfer companies, and additional needed these lenders to setup safeguards to make sure consumer protection and counter illicit transactions for example money washing and terrorist financing.


The central bank stressed that it doesn’t plan to endorse any cryptocurrency, as it is neither issued or guaranteed with a central bank or supported by an investment. Nonetheless, the institution stated it aims to manage the tech when employed for delivery of monetary services, designed for payments and remittances, to make sure consumer protection and financial stability.

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