The Philippines Brings New Cryptocurrency Regulatory Framework
On Monday, February 4, The Philippines regulatory body - the Cagayan Economic Zone Authority (CEZA) - brought in place a new regulatory framework to govern cryptocurrency operations in the country. The new regulations cover areas relating to the acquisition of digital currencies including the utility tokens and security tokens.
Called as the Digital Asset Token Offering (DATO) regulations, the basic aim is to protect local investors in the volatile crypto industry without stifling innovation and promoting FinTech solutions. A report from the Vietnam News suggests that the new guidelines will require all crypto asset creators to provide clear and transparent documents about the project, the issuer, besides other things.
Speaking on this matter, Raul Lambino, chief executive officer of CEZA said that the DATO regulations aim at promoting a structured growth of the local crypto industry. He said: “We aim to provide a clear set of rules and guidelines that will boost innovation while also ensuring proper compliance by actors in the ecosystem. We hope that these set of regulatory innovations will promote blockchain and crypto adoption by institutional investors and the financial system.”
The Philippines government has set a special licensed exchange for listing of new digital tokens dubbed the Offshore Virtual Currency Exchange (OVCE). Before the token issuance, participants need to confirm their arrangements with CEZA-accredited wallet providers and custodians.
The DATO rules have been broken down into three different levels of token offerings. The first level includes assets and investments under $5 million with payments made in digital tokens. The second level includes investments between $6 million to $10 million, and the third level includes investments above $10 million.
Furthermore, CEZA has also collaborated with the Asia Blockchain and Cryptocurrency Association (ABACA), a self-regulatory industry representing the crypto industry of The Philippines. The role of ABACA will be to ensure the enforcement and execution of the regulations laid by CEZA. It will also keep CEZA informed regarding any violations done by participants as well as by offshore crypto exchanges.
CEZA CEO Lambino said: “The safeguards built into Ceza’s rules and system will lead to greater investor protection and transparency. The involvement of DA agents and experts bring in competent and neutral third parties into the process to help ensure issuers are truthful and accurate.”
The government regulator stressed that collaboration with local industry players and FinTech firms will keep the government updated on new innovations in the emerging crypto sector. So far CEZA has approved 19 crypto exchanges in the country to conduct operations officially.