Bitcoins in the Philippines
Monetary authorities in the Philippines are studying the regulation of Bitcoin to protect users of the digital currency.
Central Bank Governor Amando Tetangco Jr. said they are studying the appropriate regulatory approach to this innovation. “We are trying to better understand the intricacies of its use and implications on consumer protection. This innovation could possibly offer a low-cost remittance solution, but we would need to have some level of confidence that the weaknesses could be addressed,” he said.
Governor Tetangco said although Bitcoins or virtual currencies could be used as a medium of exchange and unit of value, which are part of the traditional definition of money, these instruments are not issued “by a central bank.”
“It has recently come to the attention of the BSP [Central Bank] that virtual currencies like Bitcoins are now being exchanged in the Philippines. This is the reason we put out an advisory just this week to warn the public that in the Philippines these [and other virtual currencies] are still unregulated,” he said.
He said those who engage in virtual currency exchange could lose their money through a number of ways. He said these include outright fraud and system failure, as trading would be exchange platform-dependent.
“There have been a number of cases reported where the trading platforms have gone out of business or failed,” he said, adding that users might also commit some mistakes, for example when the virtual currencies were “stolen” from the users’ digital wallet.
“As we understand it, there still isn't global agreement on how to handle this new technological innovation,” Governor Tetangco said.
Bitcoin is defined by Wikipedia as a peer-to-peer payment system and digital currency introduced as open source software in 2009 by developer Satoshi Nakamoto. It is called a cryptocurrency, because it uses cryptography to control the creation and transfer of money.
The controversies surrounding bitcoins have alarmed regulators in Japan and the US. Japan, in particular, has moved to outline rules on bitcoin trading, including barring banks and brokerages from handling the digital currency, after some bitcoin exchanges like Tokyo-based Mt. Gox collapsed.