PH Senators Recommend SEC, BIR, BSP etc in Digital Asset/Cryptocurrency Task Force

September 24, 2019 – On the Senate Hearing by the Committee on Banks, Financial Institutions and Currency chaired by Senator Grace Poe, it was recommended that a task force be created to study the field of fintech, digital assets, and cryptocurrency.

Via online news site Rappler, the Senators admitted that due to the complexity of the subject matter, the recommendation is not to rush drafting a law, but to create a task force composed of the following agencies to study the field.

Bangko Sentral ng Pilipinas (BSP)
Securities and Exchange Commission (SEC)
Philippine Deposit Insurance Corporation (PDIC)
Department of Finance
Cagayan Economic Zone Authority (CEZA)
Also via Rappler (expounded by Inquirer), Senator Francis Tolentino proposed that the Department of Labor and Employment (DOLE) and the Bureau of Internal Revenue (BIR) be included in the task force. He said DOLE must be included so that OFWs can be properly informed and protected. As for the BIR, he said this is for the agency to study how cryptocurrency can be subject to taxation.

Update: SCI Ventures, a licensed virtual currency exchange in the Philippines, co-founder Miguel Cuneta said the Fintech Alliance PH and SCI Ventures will be part of this group as well:

Senator Poe highlighted that while most Filipinos are not aware of cryptocurrencies, some have been availing through online lending. “Without proper information and education, a lot of them are actually victimized,” she said.

It can be remembered that SEC previously issued a press release as to how some scam companies are justifying their earnings by saying they get it from trading cryptocurrencies and forex.

Satoshi Citadel
@SCI_Ventures
Happening Now: Senate hearing by the Committee on Banks, Financial Institutions and Currency chaired by Sen Grace Poe on cryptocurrencies & digital assets.

The hearing was held to discuss Senate Resolution no. 129 and Senate bill no.1041 or the Digital Asset Act of 2019

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SEC, for its part, are in the process of creating rules to govern initial coin offerings and digital assets. SEC and BSP are in regular discussions “so that they can come up with actual suggestions for legislation,” Senator Poe added.

Cryptocurrency Exchanges have two key elements: 1) converting crypto to fiat (PHP) and 2) an order book exchange where users can set their buy and sell prices. Converting cryptocurrency to fiat (legal tender) is governed by the BSP. Order book exchanges are governed by the SEC. BSP already issued Circular No. 944 that establish guidelines for licensed virtual currency exchange companies that facilitate crypto to PHP conversions and vice versa.

CEZA, being the government agency responsible for managing the Cagayan Economic Zone, has set up its own rules for companies that want to engage in cryptocurrency, fintech, and blockchain while being a locator in the economic zone. For readers, especially those outside the Philippines, it is important to know the difference between a CEZA License and a BSP Virtual Currency License.

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