The Philippine central bank has announced their plans to regulate “bitcoin operators” on Saturday morning, as a part of their ongoing program to improve the cyber security systems of banks and alternative financial institutions.
The nation’s central bank is particularly concerned with the vulnerability of Swift messages and its potential negative effect on the country’s existing banking systems. Central bank deputy governor Nestor Espenilla told Reuters in an exclusive interview that that the bank has already created a new division within its core IT supervision group to handle fraudulent transactions and hacking attempts.
As an added security measure, Espenilla also added that their special cyber security group will investigate bitcoin operators to discourage money laundering and restrict the settlement of fraudulent transactions.
According to the central bank deputy governor, the nation’s policy makers and agencies are collaborating to tighten regulations for remittance companies and exchanges, including bitcoin exchanges, startups, and brokers.
Over the past two years, bitcoin startups in the Philippines including Coins.ph and Rebit.ph have become increasingly popular and successful, by providing Filipinos easy and simple methods of purchasing and selling bitcoin and using the virtual currency to settle utility bills. Most notably, Coins.ph partnered with one of the country’s largest banks called Security Bank, to enable users to make instantaneous purchases of bitcoin through 24/7 atms.
The regulations set to be drafted by the Philippine policy makers could restrict the services of existing bitcoin startups and could force users to provide more sensitive information when dealing with transactions and exchange of fiat to bitcoin.
“That is what we are looking to do, whether it is now time to impose hard regulations for virtual currency operators. Right now, we look at them as akin to remittance companies,” said Espanilla.
The Philippine government first issued a warning on virtual currencies on April 30, 2014, citing theft risk, value loss risk, legal risk, loss risk, and failed platform risk. More than two years later, the government of the Philippines are going back to their prior regulations for virtual currencies and are planning to tighten them in the near future.