- PSE said that it already has a robust infrastructure and investor protection safeguards in place to tackle crypto trading.
- PSE President, however, warned investors not to be swayed by the crypto market volatility in the hunt for instant riches.
East Asian country the Philippines looks all set to step up its crypto game! As per a CNN report last Friday, July 2, the Philippines Stock Exchange (PSE) is looking for regulatory approval to kickstart its crypto trading operations.
PSE president and CEO Ramon Monzon said that this will be the country’s first legal crypto trading exchange. The Philippines Securities and Exchange Commission (SEC) is yet to issue guidelines for crypto trading in the country. The PSE president stated that the idea to delve into the crypto space was discussed two weeks ago during a top management meeting. Monzon added:
If there should be any exchange for cryptos, it should be done at the PSE. Why? Number one, it’s because we have the trading infrastructure. But more important, we’ll be able to have investor protection safeguards especially with a product like crypto.
This is not the first time that the SEC will be dealing with the request of having a crypto exchange. Back in 2019, the government regulators started researching the rules for governing crypto asset trading. The Philippine SEC started seeking comments from banks, the public, and investors, on whether the country was ready to have its own crypto exchange.
Besides, the Phillippines has also been working on establishing itself as a crypto hub in the region. For this, back in 2018, the country opened up Special Economic Zones in Cagayan.
PSE President – Beware of the Crypto Market Volatility
In all fairness, Monzon also issued a warning about the crypto market volatility. He also spoke about bringing a structured change to the crypto market. Monzon stated:
Yang crypto wala namang fundamentals yan eh (Cryptocurrencies have no fundamentals). It’s all capital gains, meaning the price I get from my crypto is the price you are willing to pay… So a lot of people are attracted to that because of the volatility. Instant riches could be instant poverty too…
If there’s going to be any structured trading of crypto in the Philippines, dapat sa atin yan (it should be under our watch). Unfortunately, we are not in a position to do that now kasi wala pa tayong rules from the regulator eh (because we don’t have rules yet from the regulator).
With PSE leading the efforts to introduce crypto trading, we can expect a regulatory go-ahead anytime soon.
Licensing Crypto Trading
Earlier this year in January 2021, the Philippines central bank – Bangko Sentral ng Pilipinas (BSP) – expanded its regulatory supervision over the crypto space. The central bank introduced a broader licensing regime for crypto companies operating in the country.
This made it mandatory for all crypto firms operating in the Philippines to get a license from the central bank. Furthermore, exchanges facilitating only crypto-to-crypto trading pairs also need to get approval from the central bank. Back then, BSP Governor Benjamin E. Diokno said:
We have seen accelerated growth in the use VCEs in the past three (3) years and it is high time that we broaden the scope of existing regulations in recognition of the evolving nature of this financial innovation and set out commensurate risk management expectations.
It would be interesting to see whether if the PSE will be working in coordination with the central bank to establish the crypto trading facility.