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Why Crypto is Booming in the Philippines

Why Crypto is Booming in the Philippines

The Philippines is having a moment with cryptocurrency, which largely can be attributed to the country’s own political leadership.

A combination of the Filipino government and the central bank, the Bangko Sentral ng Pilipinas (BSP), have a lot to do with the growing pro-Bitcoin sentiment in the Asian country. Indeed, for the nation’s authorities, cryptocurrency may well prove to be a way to modernize digital payment systems, fitting in well with the schemes already established.

Bitcoin trading volumes have increased

Data shows that Bitcoin’s trading volume on LocalBitcoins has increased significantly, with the predominant turning point back in December 2017 in the heat of the bull run. Trading volumes have continued to rise since then, showing a weak but definite correlation with the cryptocurrency’s price.

The week claiming the highest trading volume commenced 15 September 2018 when Bitcoin benefited from a two-day market surge, reaching USD 6,400.

While transactions in the last few months have slowed down on LocalBitcoins, this is most likely because there are now more authorized cryptocurrency exchanges for Filipino’s to use.

Crypto fits in with the government’s fintech scheme

Providing a solid regulatory framework for cryptocurrency seems to be key for the Filipino government as part of its larger plan to modernize the nation’s digital payment systems. Governor of BSP, Benjamin Dioknoof, recently noted that the 2016 National Payment Systems Act “bolsters the central bank’s capacity to foster the efficiency of payment systems as pipelines of funds in the financial market.”

Vice president and senior credit officer with Moody’s Sovereign Risk Group in Singapore, Christian de Guzman, commented on the Filipino government’s approach towards cryptocurrency, saying that regulation efforts are part of a wider attempt to facilitate electronic payments. ”I think that’s a key point,” he added.

The number of regulated exchanges is growing

Last week the tenth cryptocurrency exchange in the Philippines was granted approval to operate by BSP. The most recent group of approved exchanges include Bexpress Inc., Coinvillel Phils Inc., and Aba Global Philippines Inc.

But cryptocurrency exchanges can operate legally in the Philippines without the green light from the central bank by obtaining an offshore license from the government-owned Cagayan Economic Zone Authority (Ceza). With Ceza-approved exchanges counted, this brings the total up to 29 legally operational cryptocurrency exchanges in the country.

The itch to join in with the cryptocurrency action has been felt by the mainstream banking sector; one of the largest banks in the country, Union Bank of the Philippines (UBP), has even installed a Bitcoin ATM machine at one of its main branches, receiving permission from BSP to do so. All you need to use the machine is a UBP account and a Bitcoin wallet.

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Exclusive: How a Local Startup Was Instrumental in Pakistan’s Decision to Legalize Crypto

How a Local Startup Was Instrumental in Pakistan's Decision to Legalize Crypto (2)

Pakistan’s own national celebrity and humanitarian Wakar Zaka has told Bitcoin News that his project, TenUp, played a key role in both informing the government about the technology and rousing a significant pressure group among the country’s population in favor of cryptocurrency legalization.

Pakistan’s Finance Minister Asad Umar has issued a recommendation to legalize cryptocurrency trading and business in the country. Around 5,000 digital currency exchanges are to be registered, while the cryptocurrencies will be classified as “investments” and net gains will be subject to taxation as per the US’s standard.

The State Bank of Pakistan (SBP) banned cryptocurrencies in April last year, so observers are asking, why the policy U-turn now?

Bitcoin News caught up with Zaka where he explained the vital role his own cryptocurrency project TenUp had in influencing the government’s decision.

TenUp was actually a test case to use and present to the government to show how cryptocurrency work… the government was very humble and up for the technology so I knew that I had a chance.”

Zaka has been in contact with Finance Minister Umar for a while now and his relationship with the country’s top government officials including the prime minister meant he knew they would be a careful audience for his ideas.

The new cryptocurrency legislation is still in a “recommended” stage but should be rolled out by 20 July given its strong support from the finance minister who has assured there will be a focus on know-your-customer (KYC) and anti-money laundering (AML) policies when it becomes legal to trade. It is particularly exciting news as it will be the first time Pakistan is taking the lead in technology, particularly among its neighboring countries, Zaka noted.

The government task force

He is currently working closely alongside the new government-imposed task force devoted to ensuring the cryptocurrency legalization is rolled out responsibly and practically.

”The task force is taking contributions directly from us; basically, it’s us behind all the decisions. They will send us messages and ask us about stuff. I have full faith in the new government. The president of Pakistan is educated about the technology and is pro-blockchain. He is the first national leader in the region to be this outspoken in favor of it. He explains the technology in the common man’s language- that’s a very good sign for us.”

The task force is made up of ”tech-savvy guys” there to create appropriate legislation. Zaka has been showing them videos and presentations and sharing information about the TenUp project.

On the task force’s agenda is mainly how cryptocurrency will be traced and how to appropriately license come 5,00 exchanges to operate. There will also be a special investigation team set up for initial coin offerings (ICOs).

Zaka’s next ambition is to help launch a state-issued cryptocurrency for Pakistan; he has been using Venezuela and Iran as examples for the government to look into. But the Pakistani state is still in need of some convincing that it is the best decision. Zaka argues, however, that a government-issued cryptocurrency could be a way to bring in revenue from across the globe.

”Pakistan should hold its own ICO because the president has good credibility all around the world, better than Venezuela for sure. The entire world would look into it.”

He has high hopes and expectations that the G20 held in Osaka, Japan in June will be a big turning point for how cryptocurrencies are perceived on the international stage. ”India will definitely follow us in legalization,” Zaka predicted, ”we will see that in a month or so.”

Legalizing cryptocurrency will of course usher in some macroeconomic changes for the country, allowing much of the vast number of unbanked people in Pakistan access to personal accounts. New businesses and the technology sector would also flourish, perhaps even bring the ”tech revolution” Wakar predicts.

Celebrity for the good and bad

Zaka has happily used his celebrity status and huge fan following to share the message and educate people on cryptocurrencies. ”It was very difficult to make them understand how cryptocurrency can work and can eliminate money laundering for example,” he acknowledged.

”Everyone in my region, in India and Pakistan, thought this was a tool for money laundering. I have been education fans for about six months. There has never been another case of a celebrity with a big fan following promoting cryptocurrency properly. When a celebrity starts promoting it, their fans will follow it. Those fans become an army and then they start pushing the government. If other celebrities in India or Nepal start speaking up about it, I think people will definitely start to understand.”

Pakistani celebrities have historically tended to protest against religions such as Islam and build popular movements behind these ideologies so Zaka’s actions were quite unpredicted.

The problem, of course, comes when celebrities such as Floyd Mayweather throw their weight behind token projects that prove to be multilevel marketing or Ponzi schemes. These cases bothered the Pakistani government, of course, and Zaka made it clear he was not in conversation with the government for personal financial benefits by promoting his own cryptocurrency project, TenUp.

”In every region of the world celebrities should use their fame to help people not just to promote themselves. If you have fame you have responsibility. Celebrities in Nepal and India should look at the bigger picture.”

”I’m very happy the government has made the decision to legalize cryptocurrency and its a very big thing for our country,” Zaka finished.

 

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China Vs USA: Who is Winning the Blockchain Battle?

China Vs USA_ Who is Winning the Blockchain Battle_

China and the US are the superpowers of the 21st century and their respective blockchain innovations have both countries at the top of the technological leaderboard. As the two countries face off in a highly publicized trade war, many people are also looking to see which nation is winning the blockchain battle.

The blockchain jobs on offer

One way of comparing the industries is to examine the blockchain jobs on offer in each country. Right now, it looks like the US has got the upper hand. According to data compiled by The Next Web, nearly half of the related jobs on recruitment site Glassdoor globally were based in the US, followed by the Uk then India.

With the caveat that glassdoor is a US-based company despite hosting international job posts, China had just 42 positions advertised compared to the US’s 2,616.

Notably, the top three employers are IBM with 110 open positions, followed by Ernst & Young, Oracle, and Deloit– all well established corporate giants in the technology world.

Opposing government approaches

Where China may be superior, however, is its government’s commitment to promoting the development of the technology and President Xi Jinping’s open support for blockchain, calling it a ”breakthrough” technology. Following his positive comments, the state-controlled media station CCTV ran a one-hour special explaining that “the value of blockchain is 10 times that of the internet”.

The People’s Bank of China, the country’s central bank, has spearheaded blockchain testing in finance, and there is a general consensus from the experts that when it comes to core technological developments alone, China is beating the US.

China’s rapid industrialization and development as a nation since the 1980s shows just how powerful the government’s commitments have been, as well as demonstrating the benefits of a having heterogenous authoritarian leadership no matter how controversial this concept may be.

The influence of crypto

Neither country has what would be described as pro-cryptocurrency policies, but the Chinese government has taken a much harder stance. Regulations prohibit financial firms holding or trading cryptocurrencies, and while trading platforms were effectively banned in 2018.

In the US many states are also pursuing regulatory efforts to cover cryptocurrency instruments but cryptocurrency trading remains legal, as does holding initial coin offerings unlike in China.

While cryptocurrency only accounts for a percentage of blockchain use cases, the inability of start-ups to explore tokens and digital currency without fear of government intervention sets China back in terms of what blockchain development teams can work with. In mid-April last year, police in Shanghai went so far as to stop an event for cryptocurrency entrepreneurs.

There is no clear frontrunner in the blockchain race as it stands, but many pundits are focused on China’s robust development policies and quality of innovations so far despite the US’s upper hand for cryptocurrency.

 

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Reserve Bank of India Pulls Back From Central Bank Issued Crypto

Reserve Bank of India Pulls Back From Central Bank Issued Crypto

A news report today by the Hindu BusinessLine revealed that the Reserve Bank of India has shelved its plan to issue a central bank digital currency.

Plans to issue a central bank digital currency was first declared in April of last year. The initial plans may have been driven by the burden of current rising costs in printing paper fiat money. However, it had set up an interdepartmental group to investigate the possibility of a central bank issued and controlled cryptocurrency. Reports were generated on the feasibility to that effect, however, findings have not been made public.

Around the same time, it had already put pressure on the development of cryptocurrency business in the country, cracking down on ICOs, exchanges and the ban on banking services for crypto-related transactions.

According to the news outlet, it quoted an undisclosed source saying “The government doesn’t want the digital currency anymore. It thinks it is too early to even think about a digital currency.” Moreover, they had not received any further response from the RBI about the matter.

The source further reports that the initial attempt to launch the digital currency was to check concerns over black money, money laundering, and cybersecurity threats. It would seem the findings may have expounded on such as the sudden retracting of their decision comes off as a surprise, seeing how some days ago, a report was released suggesting that the committee overseeing cryptocurrency was considering legalizing digital currencies – one would have thought it was a favorable premise to launch the rupee back cryptocurrency.

Further, the source also quoted the founder of cryptocurrency exchange and blockchain start-up Belfrics, Praveen Kumar saying: “It is premature for RBI to launch crypto-rupee, as more understanding of the crypto economy needs to be achieved. It is the right decision to delay the process and see how the publicly traded peer-to-peer economy is shaping up.” It is of the opinion that the crypto space in the country should be given more time to develop while watching how other smaller nations like the UAE and Singapore are adapting to the new technology.

Saudi Arabia had announced last year that its state-managed cryptocurrency will be launched in association with the United Arab Emirates (UAE) in 2019 as a solution for international payments.

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Research Claims 1 out of 40 Bitcoins Seized by Government at Some Point

According to research by The Block Crypto, 453,000 Bitcoins have been seized by various governments at some point in the past. This is 2.6% of the 17.366 million Bitcoins in circulation, approximately 1 out of 40.

Some 85.6% of these seized coins came from the Silk Road shutdown and a crackdown on a crime group in Bulgaria. It is important to note that the amount of seized Bitcoins at any given time is much less than the total, as since governments usually auction off the seized funds for cash.

Theoretically, Bitcoin cannot be seized if used properly, since Bitcoins are cryptographically secured with a private key. However, if not stored properly or if forceful persuasion tactics are used, private keys can end up being revealed.

The Silk Road is probably the most well-documented seizure. A total of 174,000 Bitcoins were seized from the Silk Road when Ross Ulbricht was arrested in October 2013, worth nearly USD 54 million at the time. All of these have been auctioned off.

In May 2017, the Southeast European Law Enforcement Center (SELEC) announced that it had seized 213,519 Bitcoins worth USD 500 million, and these are believed to be in the coffers of the Bulgarian state. There is some controversy over whether this happened, due to conflicting official statements released by the Bulgarian government.

Other seizures include 24,518 Bitcoins by Australia in May 2016 from a Silk Road merchant, 11,000 Bitcoins by Europol in July 2015, 6,060 Bitcoins by the United States in April 2014, 4,000 Bitcoins by the United States in June 2018, another 3,813 Bitcoins by the United States in January 2018, with many smaller ones.

The United States and Europe are responsible for practically all of the seized Bitcoins in the world, besides the one incident in Australia. Bulgaria officially claims to not have the stash of 200,000 seized Bitcoins and the United States in one estimate has no more than 10,000 seized Bitcoins after auctions.

 

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Chilean MPs Bring Blockchain Resolution to Parliament

Two members of the Chilean government put forth a blockchain adoption resolution Thursday. It is currently being reviewed by the lower house of the country’s parliament, Camara de Diputados.

The members of parliament (MPs) Miguel Angel Calisto and Giorgio Jackson presented the drafted resolution to the government with the hopes of implementing a ”blockchain ecosystem” for Chile in the near future.

Calisto made the argument that the technology could be used to add transparency and trust to the work carried out by different public agencies, also reducing the risk of private information that they have access to being used in a malicious way. He told parliament: “It is the moment that these new technologies that are at the forefront of innovation, are seen as a real option in a Chile that must look to the future and ensure the good of all its citizens.”

Jackson added that that aim of the blockchain resolution is to increase cybersecurity standards and reduce bureaucracy within public services but that blockchain should not be limited to this, pushing that it’s ”transformative” and ”revolutionary” potential of decentralizing information should be explored further.

He also made a point that instituting blockchain data sharing solutions could save costs, citing a recent report produced by the Chilean Economic Prosecution office which points to the increasingly challenging financial situation that maintenance of notaries has become for the government.

Calisto and Jackson first registered the resolution in August, backed by eight of their colleagues. In it, the resolution appeals to president Sebastian Pinera to take action in instituting blockchain solutions in the country, with an offer to conduct studies into the potential advantages of blockchain-based security and energy solutions.

The president of Chile’s Central Bank, Mario Marcel, said in May that he was considering the establishment of regulation around cryptocurrencies to prevent them being used in the country for any illicit activities. Pointing to terrorist financing and money laundering, in particular, Marcel said that formulating a legal structure around digital currencies could help ”monitor risks”.

 

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Malaysia Pushes Top Industries to Blockchain

Malaysia’s top three industries are being propelled into blockchain adoption in an effort to promote economic growth alongside transparency, efficiency, and sustainability with the help of a government task force.

The sectors being targeted by the Malaysian Industry-Government Group for High Technology (MIGHT) task force include renewable energy, palm oil, and Islamic finance.

In the energy sector, the government task force has held discussions with local companies to investigate how blockchain can assist in the growth of renewable energy users. Blockchain was decided to be of use in this area by providing transparency over how the energy was generated, be it from sustainable sources or not, meaning that customers can choose to purchase only green energy if they wish to do so.

Palm oil has become a contentious commodity due to a lack of ethical labor practices in its production, including reports of child labor coming from several countries. With blockchain, MIGHT wants to give buyers the ability to see that the palm oil they are purchasing from Malaysia comes from a government-approved ethical production line, while also setting up the government infrastructure necessary to monitor production in the country. Australia has also used a similar blockchain strategy to monitor the origin of sugarcane entering the country.

Islamic banking in 2016 accounted for 28% of Malaysia’s financial sector, with the government hoping they can increase this to 40% by 2020. MIGHT believes that blockchain can be used to offset the high costs of the strict ethical regulations that Sharia laws require from financial and banking services. Similar operations have already begun appearing in the Middle East where banks have started pegging debt to gold units, presenting this as a blockchain smart contract.

Bitcoin News has previously reported on the compatibilities of cryptocurrency and Sharia-compliant financial practices, with the first Islamic law abiding crypto exchange launched earlier this month opening the market up for Muslims.

 

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UK Government Questioned on Protection of Domestic Blockchain Industry in Bear Market

A question was posed to Lord Bates in parliament Monday regarding the UK’s ability to support the domestic blockchain industry in the current bear market that Bitcoin and other cryptocurrencies are facing.

Lord Taylor of Warwick asked his colleague: “Her Majesty’s Government, what assessment have they made of reports that the value of crypto-currencies in the United States is falling, and of the potential effects that such a decline might have on the UK blockchain industry?”

Lord Bates, Minister of State at the Department for International Development responded, saying that as of yet the government has not made a formal assessment of the implication that the current market performance might bring. He added, ”However, the Government continues to monitor developments in the cryptocurrency market.”

The Cryptoassets Taskforce was pointed to by Lord Bates as evidence that the government is taking the potential risks of cryptocurrencies seriously. The taskforce comprises of members from HM Treasury, the Bank of England, the Financial Conduct Authority (FCA) and members of parliament, and maintains responsibility for determining any issues that the blockchain industry might face.

A report from the Cryptoassests Taskforce is due this Autumn, and Lord Bates’s pressing question will hopefully be answered within the publishment.

A ‘balanced approach’

Last week, Bitcoin News reported that the UK’s FCA chief Andrew Bailey wants the nation to take a ”balanced approach” to the cryptocurrency industry. In a speech in London, Bailey said that the FCA is keen to explore the potentials of the underlying technology of cryptocurrency, blockchain. He told the crowd, “The FCA is firmly a supporter of innovation.”

With the UK’s largest financial regulator onside, this is promising that the UK’s growing blockchain industry will get official support, despite the poor performance of the market this year.

 

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Chinese Justice Department Uses Blockchain to Track Parolees

Officials in the southern Chinese city of Zhongshan have instituted a blockchain system to track the movements of those on parole in the district.

The new blockchain network is said to improve the quality of community correction that the justice department can serve, upgrading its ability to track parolees activities around the clock. Monitoring the community prisoners previously had restrictions imposed, including regional and time constraints. The blockchain system, however, lets officials view data at any time from any location.

Changes to the electronic bracelets mean that wearers are no longer required to regularly report their own activities or require officers to make visits to check up on them, meaning less friction is created between parolee and officer.

The new blockchain system also employs data analysis that can detect the possibility of criminals re-offending through sharing the action trajectory and situation of the community prisoners with the Department of Justice. An analysis is done through an accumulative data check of the behavioral tendencies of the parolees and their current situation. If there are any indications that re-offending may occur, staff are triggered to make an early intervention and prevent any criminal activities from occurring.

In this specific use case for blockchain, the Chinese government is able to reduce the manpower required to supervise the offenders, creating both financial savings and preventing potential situations of conflict. Whether it is able to actually reduce the number of re-offending parolees is still a question as the network was only rolled out this month, but the potential to do so is certainly there.

It is not just the government in China committed to developing fresh blockchain solutions; a recent study shows that last year China was responsible for 56% of the world’s blockchain patent applications, with Chinese multinational holding conglomerate Alibaba claiming 10% of the overall total. The study also indicates that the number of blockchain patent filings has increased from just 134 in 2016, to 406 in 2017.

 

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Brazilian Government Inspects Activities of Local Crypto Exchanges

In an apparent government crackdown on corruption and money laundering, Brazilian cryptocurrency exchanges have been given a 14-point survey to fill out detailing a number of areas in their operations.

Local news outlet Portal do Bitcoin covered the incident in an exclusive piece after obtaining a copy of the document that was served to the exchanges, despite the message being signed by the prosecutor Ana Paula Bez Batti warning that the dissemination of the message is prohibited by law.

The questionnaire covers a number of topics that will supposedly contribute to the study of combating corruption and money laundering in Brazil, and covers topics including compliance issues, limits offered to customers in relation to declared income, control over the number of operations, control over the originator’s identification, hashes of the portfolios and data of the partners themselves.

Question 10, for example, reads: ”Does the Crypto-Exchange trade popular crypto-coins for their anonymity, such as Monero, Dash and Zcash?” most likely querying these coins in particular as they are notably more difficult to trace ownership of. Other questions were more direct, such as number six: ” What measures, if any, does Crypto-Exchange take to mitigate risks related to money laundering and terrorist financing?”

The Ministry of Finance supposedly issued the questions as part of a stealth dossier “to protect the integrity of the financial system”. Each brokerage was notified they had five days to respond, with the data promised to be kept entirely confidential.

What do the exchanges say?

Portal do Bitcoin contacted three of the countries top 10 exchanges by trading volume, each giving a different response to how they are handling the situation and each wished to remain anonymous. One has been fully compliant, answering each question and has already sent its response. Another claims they do not know if they have received it but are looking onto all possible communication channels.

The final exchange to comment said they do not have any plans to respond to the survey, as it was not sent as an official document from the Brazilian government but rather sent through its contact form. As most inquiry forms on similar platforms send an automated reply, it is unlikely they will be able to claim they never received the survey when the government approaches them.

 

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