The Philippines’ authority for government-controlled economic zones recently revealed that it is planning to issue licenses to 25 cryptocurrency exchanges. This means that the government administrator is planning to limit the issuance of licenses. The government is also planning to introduce regulations for the cryptocurrency market.
Philippines aspiring to become fintech hub
The Cagayan Economic Zone Authority (CEZA) located to the northern tip of the country is a government-operated economic zone. This zone will allow 25 cryptocurrency exchanges to operate as per its tax-friendly rules and laws. According to the rules, each crypto exchange platform will have to invest minimum $1 million over the span of two years and will have to establish its physical presence in the zone through an office. At present, the CEZA has received around 60 applications from various cryptocurrency exchanges. Trade analysts have revealed that the Philippines is planning to become a fintech hub.
To get the license, the crypto exchanges will have to go through strict integrity checks and also fulfill other regulations that are a part of the cryptocurrency sector. Although there is a restriction on direct licenses, each cryptocurrency exchange can own 20 to 30 sub-licenses for brokers and traders. According to the CEZA chief, Raul Lambino,” We do not want the Philippines to be a haven for scammers even if these scams are happening abroad. That’s why through our probity and integrity check we can determine if their transactions are just designed to entice unsuspecting people to invest in Bitcoin or whatever crypto coin that is a fraud.”
CEZA to give licenses to 10 platforms initially
At first, CEZA will give license to 10 crypto firms so that they can take advantage of the tax and generate employment. Lambino stated that the 10 crypto exchanges will be from Hong Kong, Japan, Korea, and Malaysia who can go into initial coin offerings, cryptocurrency mining or even exchange. According to Lambino, the regulations are designed to prevent Ponzi schemes and authorities will track down whether an ICO is asset-backed or not to find out whether there are any scammers operating.