Bring cash or card, not your cryptocurrencies, when shopping in the Philippines.
Cryptocurrencies like Bitcoin and Ethereum will not be legal tenders any time soon even if the government is taking a wait-and-see stance.
This was the advice of UK-based think-tank, The Economist Intelligence Unit (EIU).
But it said the government is expected to eventually curb crypto deals over the next five years as more awareness of its risks are shown.
In the medium term, we expect authorities to promote cryptocurrency use cases with supportive policies through government initiatives,” the EIU said.
The think tank maintained that the influence of cryptocurrency in the Philippines is clearly visible.
Play-to-earn gaming, where players can earn fiat currency by engaging in a gaming activity, became popular during the pandemic.
The EIU noted that the Bangko Sentral ng Pilipinas (BSP) still relies on investor education to warn the people about the risks attached to play-to-earn gaming.
Nonetheless, EIU said the BSP has been expanding its regulatory coverage to encompass more virtual asset providers, thus laying down better regulatory clarity than many other economies without dedicated cryptocurrency regulations.
Poorly regulated cryptocurrency markets pose risks to the financial system in developing markets such as the Philippines.
Cryptocurrency dealers and exchanges, usually established on vague legal grounds, lack statutory reserve balances, among other considerations.
This raises the risk of bankruptcy, often leading to a loss of deposits and income for retail investors.
“Patchy technological readiness in developing countries, such as poor connectivity in rural areas, might also mean a higher chance of investors falling victim to cybercrime. The rising adoption of cryptocurrency in countries such as the Philippines is creating such risks,” EIU said.