Philippines Delays Crypto Framework Publication
The Philippines’ financial regulator has decided to postpone the release of a legal framework for the crypto industry, originally scheduled for late 2022, despite a tumultuous year.
That’s according to a report published by local news outlet, Philstar Global. In the face of numerous market failures in 2022, the Philippines’ financial regulator has opted for a cautious approach and delayed the publication of a legal framework for the crypto industry, which was initially expected to be released by the end of the same year. However, work on the guidelines is still ongoing, and there is a possibility that the results could be made public in 2023.
Scrutinizing crypto failures
According to the chairman of the Philippines Securities and Exchange Commission (SEC), Emilio Aquino, the regulatory authority has adjusted its previous deadlines for introducing the crypto framework in the country. The SEC had originally planned to roll out the guidelines in 2022, but they held back in order to thoroughly study the reasons behind the collapse of the FTX exchange and ensure the protection of investors.
Aquino stated that there is still a chance that the framework will be issued by the end of 2023, saying, “We haven’t closed the door. We really just have to make sure people don’t get burned.”
Earlier this year, the SEC joined forces with the University of the Philippines Law Center (UPLC) to collaborate on the development of guidelines for digital assets. In January 2023, the regulator introduced the Implementing Rules and Regulations of Republic Act No. 11765 for public comment. This act, which was signed into law in 2022, however, does not explicitly mention “crypto” or “blockchain.”
The crypto industry in the Philippines has been facing increasing pressure. The country’s central bank has been urging citizens to refrain from engaging in any transactions with unregistered or foreign crypto exchanges, and the SEC has echoed these recommendations.
In May 2023, the SEC identified Gemini Derivatives as an unregistered security product under national law. In the investor advisory, the Commission wrote: “The public is advised not to invest or to stop investing in the investment scheme of Gemini Trust Company, LLC.”
Last month the country hosted a meeting of the Regional Consultative Group for Asia of the Financial Stability Board. That meeting, held in the Philippines' oldest city, Cebu, highlighted the risks pertaining to crypto assets.
Potential for positive approach
Nevertheless, the Philippines remains an attractive destination for crypto enthusiasts. With its rapidly growing economy, it has emerged as one of the world’s fastest-growing markets, with over 11.6 million Filipinos owning digital assets, placing it 10th worldwide in terms of crypto adoption.
In an opinion piece published by Forkast News in April, Robert De Guzman, Head of Legal Compliance at Philippines-based cryptocurrency exchange Coins.ph, outlined his view that the country is forging a positive, workable framework for crypto assets. With that, it sounds like while the delay is unwelcome, the more important factor is that the South East Asian country devises a framework that is fit for purpose relative to the innovation at hand.
