BSP OKs 3rd virtual currency firm

The Bangko Sentral ng Pilipinas (BSP) has approved the registration of BloomSolutions Inc. as the third virtual currency (VC) exchange operator in the country.

Melchor Plabasan, deputy director and head of Core Information Technology Specialist Group at the BSP, said BloomSolutions is the third VC exchange operator approved by the regulator.

Plabasan said the BSP earlier approved the registration of Betur Inc. and Rebittance Inc. in September and October 2017, respectively.

BSP Deputy Governor Chuchi Fonacier had said the central bank is evaluating the applications of 29 companies planning to set up VC exchanges.

Cryptocurrency is a type of VC that uses cryptography – a method of storing and transmitting data in unreadable form so that only the intended receivers can read and process it. Bitcoin is the first and most popular cryptocurrency to date introduced in 2009.

Latest data from the central bank showed the volume of bitcoin transactions in the Philippines averaged $8.8 million per month in the first half of last year, more than four times the $2 million per month average in 2015.

Following the rise in the use of VCs for payments and remittances in the Philippines, the BSP established a formal regulatory framework for VC Exchanges through Circular No. 944 dated Feb. 6, 2017.

VC exchanges are companies or businesses engaged in changing VCs into fiat currency (and vice versa). The act of converting VCs into Philippine money can facilitate payments and remittances.

The circular requires VC exchanges to register with the BSP as remittance and transfer companies. These exchanges are also required to put in place adequate safeguards to address the risks associated with VCs, including control measures to counter money laundering/ terrorist financing, technology risk management systems, and consumer protection mechanisms.