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Binance, a cryptocurrency exchange, recently obtained a Virtual Asset Service Provider (VASP) license from the Bank of Spain to do business in Spain. Despite the global surge in cryptocurrencies and the downturn in the market, there is another country that Binance is paying attention to in its ambitious expansion plan that crypto exchanges are persistent-the Philippines.
In June, Binance CEO Changpeng Zhao said at a press conference in Manila that the exchange is about to obtain a VASP license in the Philippines. In addition to VASP, Binance wants to obtain an e-commerce issuer license from the country’s central bank, Bangko Sentral ng Pilipinas (BSP). The former license allows the platform to provide crypto asset trading services and the conversion of these assets to the Philippines, while the latter allows the issuance of e-commerce.
The Philippines is the world’s 36th largest economy in terms of nominal GDP and the 3rd largest economy in Asia. according to To the data from the World Bank. Despite being a small country, it is considered one of the fastest growing economies in the world due to its emerging industrialized economy, demonstrating a clear transition from agriculture to services and manufacturing. ..
Cryptocurrencies are very popular in the Philippines due to the economic changes that the country experienced when digital assets began to gain popularity.In a recent survey clearly The Philippines ranks 10th in the adoption of cryptocurrencies, with more than 11.6 million Filipinos owning digital assets.
This is also proved by the following facts according to According to data from ActivePlayer.io, 40% of all players in the popular Play-to-Earn (P2E) game Axie Infinity were from the Philippines. In fact, this game is also an economical game changer for many citizens in the country.
Related: How blockchain games create the entire economy in addition to gameplay: Report
Cointelegraph talked with Omar Moscosco, co-founder of AAG Ventures, a P2E guild based in the Philippines, about the potential the Philippines has for mass adoption of digital assets. “The Philippines has a large population without banks and a small population with few banks, and about 66% of this total population does not have access to traditional banking services or similar financial institutions,” he said.
He added that COVID-19 caused the country’s digital transformation, adding:
“The Philippines registered the maximum number of first-time users of digital payment methods at 37%. The regional average was 15%. Therefore, digital payments will account for 20% of all domestic financial transactions in 2020, 2019. It increased from 14% in the year, and the total number of electronic money transactions in 2020 was 2.39 trillion PHP (US $ 46.5 million), an increase of 61. Percentage compared to 2019. “
Jin Gonzalez, chief architect of Oz Finance, a decentralized finance (DeFi) service provider based in the Philippines, told Cointelegraph about the impact of Binance’s entry into the Philippines on the market. He states: “Binance has already received a large amount of Philippine pesos for peer-to-peer (PHP / USDT) services, and it is also a trade-off for Filipinos as it is a good price compared to local service providers. Obtaining a BSP license only justifies its operation and strengthens its position in the market. “
However, global concerns are emerging about the fight against the anti-money laundering (AML) and terrorist financing (CFT) frameworks used by VASP licensed companies.Central Bank of Ireland Release Breaking news of VASP Aimed at Help applicants strengthen their VASP registration applications and the AML / CFT framework accordingly.
This development was good for a growing ecosystem as it addresses the inevitable concerns of considering the integration of digital assets into the economy with existing financial ecosystems.At the same time, Hong Kong Introduced VASP license system in June this year. This imposes statutory AML / CTF requirements on companies wishing to do business in the country.
Currently, there are no strict regulations on both businesses and individuals, so the regulatory situation in the Philippines is still in its infancy. In fact, the government of the country seems keen to work with central banks to adopt blockchain technology and implement its use cases in different sectors of the economy. Gonzales said:
“At this point, BSP regulations are in place, but SEC regulations have not yet passed. Anyway, the Philippines is in an open position with respect to digital assets, and the intent of the regulations is to protect investors and advance technology. The aim is to strike a balance with promotion. PH regulators, especially central banks, maintain a progressive position in the adoption of digital assets. “
Earlier this year, in May, the Philippine Government’s Ministry of Science and Technology launched a blockchain training program for its researchers. Through its training programs, the government aims to adopt blockchain in areas such as healthcare, financial assistance, emergency assistance, passport and visa issuance, trademark registration, and government records.
Union Bank, based in the Philippines, has also launched Stablecoin, which focuses on fixed payments in the Philippine peso, with the aim of promoting financial inclusion in the Philippines. It attempts to link the country’s major banks to regional banks and provide financial access to parts of the country where previously no banks did not exist. Gonzales said:
For the time being, they seem happy to observe how stablecoins issued by banks (such as Union Bank’s PHX) promote financial inclusion.
However, even with the openness of the government, some companies are paying attention to the irregularities in how digital asset companies operate.Local Policy Think Tank Infrastructure Watch PH Has Sent A letter to the Philippine Department of Trade and Industry (DTI) asks us to conduct a survey on Binance for domestic promotion without the proper permission of Binance.
In response to this letter, DTI has removed the ban from the issue, stating that it has not set clear guidelines for promoting digital assets.
The introduction of the Central Bank Digital Currency (CBDC) into the economy is a major digital transformation of the country, as the majority of Filipino citizens do not have bank accounts and operate in a fairly unregulated manner due to tax and other issues. It may be a step in progress.
Moscoso said: Central banks expect that at least half of payments will eventually be made digitally by 2023. “
Related: Filipino Cryptography: Necessity is the Mother of Adoption
He added that about 70% of adults will use digital accounts for transactions by this point. This will give consumers additional options to escape loan sharks.
Despite the current bear market, the Philippines remains positive about adopting digital assets and blockchain-based business models. This outlook puts a good place for countries that have the potential to become crypto hubs.
