A representative from Binance, the world’s largest cryptocurrency exchange in terms of daily trading volume, recently attended a Philippine Senate hearing to discuss key initiatives and guidelines related to the country’s fintech and digital assets.
Chaired by Senator Mark Villar, it had, as participants, industry regulator Bangko Sentral ng Pilipinas (BSP) leading the discussion among leaders of banks and financial institutions on how the country can harness digital innovation while ensuring that appropriate guardrails are in place to protect consumers.
Binance looking to secure licenses from the BSP
During the hearing, a Binance executive revealed that they are now securing licenses from the BSP for the company to be able to operate legally in the country. Already under fire from various industry regulators, the platform also said that it is planning to sponsor a training program for new cryptocurrency traders in the Philippines.
“We are acquiring licenses through an existing company. The company that we are acquiring is already a license holder. We are working with the BSP on the acquisition. If ever, (our company) will be the first case in the Philippines,” said Kenneth Stern, general manager of Binance Philippines, in a media statement. “We are now also in talks with local universities whom we can tie up with to provide courses and certifications in blockchain technology.”
The move comes right on the heels of a freeze order by the BSP, which issued a 3-year moratorium on virtual asset service provider (VASP) applications effective September 1, and the Philippines’ Securities and Exchange Commission (SEC) cautioning the public against investing in Binance.
Binance was founded by Changpen Zhao, a developer who had previously created high-frequency trading software. Binance was initially based in China, but later on, moved its headquarters out of China following the Chinese government’s increasing regulation of cryptocurrency.
In a press briefing held in Manila last June, Zhao was quoted to have said that their company is planning to obtain a VASP license in the Philippines. In addition, they also wanted to get an e-money issuer license from the BSP. While the VASP license would allow the platform to offer trading services for crypto assets and convert these assets in the Philippines, the latter will allow Binance to issue electronic money.
PH could become the biggest crypto hub in the world
Binance has long been looking to set up shop in the Philippines but faced stiff opposition from a local think tank, which questioned the legality of its operations. This was later dismissed by the Department of Trade and Industry due to a lack of regulatory stance on the part of BSP with regard to cryptocurrencies.
The Philippine central bank has since stated that it is exploring the issuance of a wholesale central bank digital currency to be called “Project CBDCPh.” The project will be led by an intersectoral domestic team.
“I think the Philippines can be the biggest crypto hub in the world in the next few years. Just look at the adoption rate in the country. We have already surpassed credit card adoption in just a few years since it has been here. There is high potential in the Philippine market,” said Stern.
Stern adds that 78% of Filipinos remain unbanked, but crypto can help decrease that number as crypto asset holders, estimated to be around 4.3 million, could soon surpass the number of credit card holders in the country.
Cryptocurrencies are extremely popular in the Philippines due to the economic shift that the country went through during the pandemic when digital assets started gaining popularity. In a recent survey conducted by Finder, it was revealed that the Philippines ranks 10th in terms of cryptocurrency adoption with around 11.5 million Filipinos owning digital assets as of August 2022.
The crypto ownership rate in the Philippines is also listed at 16%, higher than the global average of 15%. India leads the way at 29%, with Germany landing at the bottom end of the spectrum at just 6%.
According to data from the World Bank, the Philippines currently ranks as the 36th largest economy in the world by nominal GDP and the third-largest in Asia. Despite its small size, the country is considered one of the fastest growing economies in the world due to it being newly industrialized.