Philippines Financial Regulator Takes Cautious Approach to Crypto Regulation Amid Market Turbulence

Regulatory Slowdown: Why the Philippines is Hitting Pause

Despite the tumultuous market conditions that swept through the crypto world in 2022, the Philippines’ response to legislate a framework for digital currencies has been anything but swift. The nation’s financial watchdog, the Securities and Exchange Commission (SEC), is opting for a thoughtful approach to ensuring the safety of investors rather than steaming ahead into uncharted waters.

Looking Back: The FTX Fallout and its Impact

As the wreckage of the FTX exchange collapse continues to provide cautionary tales, the SEC has wisely decided to study these events before moving forward. Chairman Emilio Aquino candidly noted, “We haven’t closed the door. We really just have to make sure people don’t get burned.” This prolonged deliberation might seem dull, but it’s crucial to understand the complexities that underscore the need for regulations.

Collaborations and Future Plans

In a bid to develop a robust legal infrastructure, the SEC has partnered with the University of the Philippines Law Center (UPLC). Their joint effort aims to craft guidelines that could potentially usher in a new era for digital assets. The public commentary phase surrounding the Implementing Rules and Regulations of Republic Act No. 11765 has already begun, although this act curiously lacks any mention of crypto or blockchain.

The Pushback from the Central Bank

The regulatory environment isn’t just static; there’s palpable pressure from the Bangko Sentral ng Pilipinas (BSP). Warnings about the risks of unregistered and foreign crypto exchanges are echoing throughout the country. Furthermore, the SEC recently flagged Gemini Derivatives for not meeting the country’s security product requirements under national law—a move that has sent shivers down the spines of traders and crypto enthusiasts alike.

The Bright Side: A Crypto-Ready Economy

Despite the regulatory clouds overhead, the Philippines continues to shine as a promising landscape for crypto. With more than 11.6 million Filipinos diving into digital assets, the country ranks 10th worldwide in crypto adoption. It’s a clear signal that while regulation is essential, the appetite for innovation and investment in cryptocurrencies remains robust.