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David Drake

April 12, 2019 Article

How the Banking Industry in Philippines is Embracing Crypto

Philippines' Union Bank has become the first bank to partner with the central bank of a country to launch a two-way cryptocurrency ATM machine. Users of this ATM will be able to sell and purchase digital assets by converting local fiat currency, the Peso, to bitcoins. The first bitcoin ATM machine was launched in 2015.

This time around, Union Bank, the seventh largest bank in the country, partnered with Philippines' central bank to offer this service to cryptocurrency users. The bank is, however, cautious of opening another ATM until its viability and performance projection has been ascertained. The launch is part of a 'sandbox' experiment.

This move is set to benefit a wide cross-section of citizens in a country where majority of the populace,
77%, do not even have a bank account.

Crypto Developments
The newest ATM isn’t the only digital development the country has seen lately. The country has always been proactive in its response to cryptocurrencies, and was among the first to even recognize it as an asset class.

The central bank has also issued its version of drafted exchange and initial coin offerings (ICO) regulations that were inspired by FINMA, the model used by Switzerland. The
Bangko Sentral ng Pilipinas (BSP) noted the deployment of the ATM, as well as the newly established regulations, but this was, in no way, an endorsement of cryptocurrencies. Its intent was purely to regulate the space 'when used for delivery of financial services, particularly, for payments and remittances.'

Considering that 10% of the country’s GDP is derived from remittances, it would be odd for the government not to hop on the crypto regulatory train. The circular issued by the BSP stated that exchanges are required to have a certificate of registration before operating as a remittance or transfer agency. It also sets the maximum amount to be transferred daily as P500,000, as well as the method of payment which is check or direct deposit.

“Fraud is a big problem with many projects today. The lack of regulation to date has been preventing the much-needed investment needed to build the next generation of decentralized platforms and applications. Regulation and oversight should help weed out bad actors and allow for investment capital to flow to legitimate companies looking to utilize investor capital,” said Joseph Oreste, CEO at

Oreste further emphasized Qupon’s compliance with the SEC and other regulatory requirements in a bid to protect their investors.

The Impact
The installation of a two-way ATM could trigger mainstream adoption of cryptocurrency use in the country. It could also act as a tool for inspiring investor trust and aid in further development of cryptocurrencies at a local level., the largest cryptocurrency exchange in the Philippines had registered over five million Filipinos by May 2018.

The Philippines is the third largest remittance receiver in the world. The use of cryptocurrencies has been well received because they provide a cheaper way of accessing remittances. Local brokerages and apps make it possible for ordinary users to trade digital assets for cash at convenience stores and any of several other remittance outlets dotting the country.

Also, the level of crypto adoption among Filipinos is higher than any other country globally largely because of strict banking regulations that make it difficult to even open an account. As such, backed by the BSP, cryptocurrencies might trigger the interest of corporations that are searching for ways to expand internationally. Investors might begin to do a double-take and ordinary citizens can feel comfortable and safe trading in digital assets.

In essence, the Philippines might just be the best place to transact in cryptos, and soon, the rest of the world will follow.

 Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.

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