This post is also available in: Español
As of October 12, 2018, the Philippine government-owned Cagayan Economic Zone Authority (CEZA), and has provided provisional licenses to 19 crypto exchanges to operate in the country. Eight other firms have also paid their application fees and are being currently reviewed by CEZA.
The provisional licenses, Financial Technology Solutions and Offshore Virtual Currency (Ftsovc) and Offshore Virtual Currency (OVC) are valid for six months. Exchanges will, therefore, be able to apply for permanent licenses when they comply with Ceza’s regulations within the period of the provisional license. A Ftsovc principal license issued by Ceza costs USD 360,000, whereas a regular license comes at the cost of USD 85,000.
Additionally, Ceza requires these cryptocurrency exchanges to make investments of at least USD 1 million within a two-year period, as well as establish a back office within the Philippines. Any exchange issued a license must also possess an authorized capital stock of up to USD 500,000 and paid-in capital of USD 200,000. Details from Ceza indicates that:
“Provisional principal licenses [allow licensees] to conduct offshore financial technology solutions business activities and offshore virtual currency exchange activities … Provisional regular licenses [allow them] to conduct offshore virtual currency exchange activities”.
The Philippines brazing up for Fintech and Blockchain
The Philippines is building infrastructure on the booming Fintech and Blockchain ecosystem. In July this year, according to the Philippine News Agency, about 20,000 jobs in Fintech will be created when authorities provide principal licenses to qualified financial technology companies. The news agency made it clear that:
“Ceza expects to earn PHP3.6 billion [$66.6 million] from the initial 25 Ftsovc licenses that it will issue, on top of the 0.1 percent share per transaction value generated from the operation of the fintech firms”.
Additionally, Ceza joined hands with Northern Start Gaming and Resorts Inc. to build a financial technology and cryptocurrency center called Crypto Valley Asia.
If all these missions are achieved, the Philippines will be among the Fintech and crypto hubs of not just Asia, but also the world providing a safe haven for blockchain, fintech, and crypto startups to flourish.