Category Archives: Cagayan Economic Zone Authority

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Philippines Sets Out Digital Asset Token Offering Regulations

Philippines Sets Out Digital Asset Token Offering Regulations

The Philippines is about to set its new regulations for the cryptocurrency industry in the South East Asian county, overseen by the regulatory body, the Cagayan Economic Zone Authority (CEZA).

The new rules, which require all operators of cryptocurrency firms operating in the country to submit more thorough documentation, will be called Digital Asset Token Offering (DATO) regulations; an exchange will be specifically launched to ensure the new guidelines are adhered to.

The Offshore Virtual Currency Exchange [OVCE] will oversee the industry on behalf of CEZA which has now published three discrete tiers of digital assets offerings. The CEO of CEZA, Raul Lambino commented:

“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.”

CEZA’s first tier will cover projects with crypto-assets whose value does not exceed USD 5 million, whereas the second tier covers projects between USD 6 million to USD 10 million. The final tier targets projects with assets over USD10 million.

The Asian Blockchain and Cryptocurrency Association (ABACA) will also create a code of conduct and work closely with CEZA, reporting any activities which step outside the required set of acceptable operating procedures as outlined in the new laws.

CEZA has already given the green light to 19 exchanges to commence operating. The official body has expressed a desire for innovation to flourish in the Cagayan Economic Zone, but under regulations which have been introduced in order to control what is seen by the Philippines government as a volatile industry.

 

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Philippines to License 25 Cryptocurrency Companies

The Cagayan Economic Zone Authority in the Philippines is drafting cryptocurrency regulations that will allow a maximum of 25 cryptocurrency companies to receive licenses to operate, although each company will be able to issue 20 to 30 sub-licenses for traders and brokers. These companies will be able to act as cryptocurrency exchanges, mine cryptocurrency, or conduct initial coin offerings (ICOs). Sixty cryptocurrency companies have already applied for licenses, so the selection process is expected to be highly competitive.

The Cagayan Economic Zone Authority controls the Cagayan Special Economic Zone in the Philippines, which sits at a major international shipping lanes crossroads in the Pacific. It is a strategic location between the Pacific and the West Philippine Sea. The zone offers lower taxes than the rest of the Philippines in order to boost employment and trade and this could be quite beneficial for cryptocurrency companies.

The primary purpose of the regulations will be to protect cryptocurrency investors. The Cagayan Economic Zone Authority will be especially strict on ICOs and will be determining whether they are backed by assets and legitimate. The CEO and administrator of the zone, Raul Lambino, says:

“There are many operating scammers who set up an exchange with very little capital and they are victimizing investors… We do not want the Philippines to be a haven for scammers even if these scams are happening abroad.”

Cryptocurrency companies that receive licenses to operate in the Cagayan Special Economic Zone will be required to invest PHP 53 million ( USD 1 million) within two years to stimulate the economy of the zone. Additionally, the companies will be required to have an office in the Philippines and must be registered with the Philippines Securities and Exchange Commission.

 

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