Regulatory changes are needed badly by the cryptocurrency market. In the Philippines, The Cagayan Economic Zone Authority (CEZA), reveals that it plans to open as many as 25 crypto exchanges. Among the things that make this a good deal is the fact that it is a tax-friendly jurisdiction in a government-operated economic zone in the northern part of the Philippines.
The move is aimed towards licensing the crypto exchanges. This means that these crypto exchanges will be legally operating in this area. However, there will be a strict integrity check. It is going to coincide with wider regulations on the part of the crypto sector as well. For instance, the ICOs will also be scrutinized. Recently, US Securities and Exchange Commission mentioned that ICOs are most likely considered a security.
For CEZA, the ICO operators should present coins that are “asset-backed”. A good example of an “asset-backed” token is the Petro which is an oil-based cryptocurrency by Venezuela.
There are already a number of applications from different crypto companies in the region. This sounds good news since companies can operate in a tax-haven zone that is strategically located just a few hours from Hong Kong, China, or Taiwan. According to CEZA chief Raul Lambino, “We do not want the Philippines to be a haven for scammers even if these scams are happening abroad”. He also added that “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 fraud”.
Earlier in April, CEZA already revealed that it is processing ten licenses to companies that are looking to have a crypto exchange, an ICO, and a crypto mining operation within this part of the Philippines. According to Lambino, “they are Japanese, Hong Kong, Malaysians, Koreans…”. He also mentioned that “They can go into cryptocurrency mining, initial coin offerings, or they can go into exchange (operations)”.
Earliest to Regulate Crypto Exchanges
The Philippines is one of the countries to publish regulations regarding cryptocurrency exchanges in February 2017. the deputy director of the Philippine Central bank lauded the move to pioneer regulations and highlighted the benefits of cryptocurrencies such as Bitcoin in providing fast and real-time transactions.
Regulations in South East Asian Region
The Philippines isn’t the only country that is making its move towards regulatory clarity. In fact, Thailand is also coming up with new laws that legalize cryptocurrencies in the country. The new law that has been introduced has established a crypto market in the country. There is also a revised tax law that pertains to the profits coming from the crypto market. According to the Digital Asset Business Decree, it has defined cryptocurrencies both as a medium of exchanging goods and digital tokens as the rights to participate in an investment.
According to Archari Suppiroj who is the director of the commission’s Fintech department, “Thailand’s Securities and Exchange Commission is working to strike a balance between those who view cryptocurrencies as evil and those who use them for gambling”.
Thailand has a different approach to ICOs. ICOs and trades must be paired with 1 of the 7 specified cryptocurrencies.