One of the biggest challenges facing cryptocurrency adoption looks set to be solved in the Philippines. Following up on its announcement to provide a draft rule for ICO regulation, the country’s Security and Exchange Commission (SEC) has also revealed that it will soon roll out new rules for virtual currency exchanges operating in the country.
In fact, the rules could come into play sooner rather than later. SEC Commissioner Ephyro Luis B. Amatong mentioned in a recent report that the draft rules will be coming in the middle of September while the final regulations will be unveiled at the end of the year.
The existence of such guidelines would be of significant benefits to both crypto exchanges and ICO promoters, and it will usher in a period of massive cryptocurrency transaction and growth in the Philippines.
As stated at the beginning of this post, the biggest challenge to cryptocurrency adoption anywhere in the world has been a lack of adequate protection for investors.
While it is true that several legitimate ICOs and cryptocurrencies are abound in the market, potential investors are scared away by a lack of regulation for such projects and crypto exchanges where assets are traded.
This story will no doubt change if the exchanges are to come under SEC regulations. Trust in cryptocurrencies will improve and investors will not think twice about doing business with the exchanges.
Additionally, a cryptocurrency exchange that meets up with the SEC requirements will now have a seal of approval that will attract institutional investors and make them want to buy more cryptos.
“We want to create an environment where investors can feel more or less safe in investing in what are essentially securities that have a digital form,” Mr. Amatong, SEC official said.
Marking the cryptocurrency exchanges “safe” for public relations will remove the negative thinking that the citizens have about cryptocurrencies; thus, opening the opportunity for more crypto trading in the country.
So far, five cryptocurrency exchanges have gotten approval from the Philippines SEC to operate as remittance service. That is, to convert the fiat to crypto and facilitate transfers.
However, the new rules will hand the exchanges power to conduct crypto trading in the numerous cryptocurrencies available. This will likely include trading crypto pairs and will increase the profit potential of crypto exchanges.
The introduction of this revenue model will lead to the rise of more crypto exchanges within the Philippines borders. As long as the new exchanges meet up with requirements, they would get an operating license and help bring in more money in the crypto markets. If the ICO guidelines were to come to play too, then setting up would also be relatively easy for infant companies.
The possibility of increasing the volume of crypto transactions conducted on Philippines-based exchanges will likely happen if the exchanges were to come under regulations (stamp of approval). The country may even go on to attract more foreign-based exchanges to set up in the region just as Malta is becoming the home of crypto and blockchain-related project.