- The Philippine SEC wants to put the crypto industry under regulation
- Authorities have begun to make crypto regulation law in the country
- Numerous unregistered crypto exchanges have “unlawfully” allowed Filipinos to use their platforms
The Philippines has always been considered the “capitol” of cryptocurrency in South East Asia because of its high trading volume and high player activity in play-to-earn (P2E) games. It is also one of the least restricted countries regarding cryptocurrency exchanges… until now. As crypto gains more exposure from the masses, the Philippine Securities and Exchange Commission (SEC) has asked the government to bring regulatory laws.
The SEC has expressed concern over Filipinos since crypto became mainstream in 2021. According to local news media Manila Bulletin, the SEC has drafted the Implementing Rules and Regulations (IRR) of Republic Act No. 11765. This new draft for public comment is also known as the Financial Products and Services Consumer Protection Act (FCPA) which includes cryptocurrencies and digital assets (primarily referring to non-fungible tokens).
The Commission stated, “The draft IRR will operationalize the newly signed law that aims to protect the interests of financial consumers by strengthening the country’s financial regulators by providing them with rule-making, surveillance, inspection, market monitoring, and more enforcement powers.”
Initially, it was signed into law on May 2022 to protect Filipino consumers regarding financial services and goods. Together with the Bangko Sentral ng Pilipinas (BSP) and Insurance Commission (IC), the SEC will gain authority to create standards for financial products such as investments, securities, credit, and games.
Filipino Regulators to Apply Strict Rules on Local Crypto
The IRR will mainly monitor three services: crypto exchanges, P2E games, and financial advisors.
According to the draft law, these services that involve financial matters need to “register with the Commission within 90 days from the issuance of such rules,” as the report says. They should also establish a Financial Consumer Protection Assistance Mechanism (FCPAM) that includes free customer service for the consumers in case of inquiries, complaints, and various concerns.
Most of all, the IRR will protect the consumers. This protection will require the financial services to evaluate their products that will specifically cater to their target market and the consumers’ needs in the digital market.
2022 saw new crypto exchanges established in the Philippine market. According to the SEC, some have led locals into “unlawfully allowing” them to use the unregistered platforms. As of August 2022, the Philippine central bank said it will not accept new digital asset service providers for three years until September 2025 to prevent more suspicious exchanges from showing up in the app stores.
With the IRR, the SEC can disqualify executives and their employees should any of them violate the laws, especially if they do not follow the restriction of the SEC regarding the collection of interest fees and other charges.
The draft law continues to add new matters, including blockchain-backed financial products and distributed ledger technology (DLT), which could soon become more accessible to the masses.