Fintech Alliance PH Supports Digital Assets Act
FintechAlliance.ph, the prime trade organization for digital finance and fintech startups, has recently expressed its support for Senate Bill 184 or the Digital Assets Act and Senate Resolution 126. This was announced during the recent session with the Senate Committee on Banks, Financial Institutions and Currencies which was attended by Fintech Alliance PH, Binance, Cagayan Economic Zone Authority (CEZA), Bangko Sentral ng Pilipinas (BSP), and Securities and Exchange Commission (SEC).
To further support the regulation of digital assets and the innovations for financial inclusion, the alliance noted that they are actively engaging in constructive dialogues with the BSP and SEC.
“The Alliance supports a risk-based regulatory regime putting consumer protection at the core. One of which is providing for mechanisms aimed at registration and regulations of emerging technologies such as digital assets,” Lito Villanueva, the Fintech Alliance Chairman, stated.
Villanueva noted the different approaches of the country’s ASEAN neighbors. According to him, Thailand was aggressive in boosting decentralized virtual currencies by approving four new digital assets companies; Cambodia was the first in the ASEAN to roll out its retail central bank digital currency (CBDC) Project Bakong; the Philippines as well as Vietnam, and Indonesia are also likely to do their respective pilots; while China and India declared a crackdown on crypto.
“We are seeing other markets or jurisdictions embracing digital assets given that most of their citizens are already transacting through various digital assets platforms worldwide… But given retail investors’ recent losses in the digital assets market, tighter regulation is inevitable,” he noted.
In line with this, the BSP expressed its desire for the Senate to draw lines on the regulations on digital assets and the digital space by drafting legislative proposals to regulate them and create clear rules defining what the central bank can do to protect owners of virtual assets and customers of virtual asset service providers (VASPS). This is because the Digital Assets Act only aims to recognize but not regulate digital assets. (Read more: BSP Seeks Passage of Digital Asset Law)
The SEC Chairman Emilio Aquino also addressed the same concern, he noted that a law directly addressing digital assets is needed to allow the Commission to be a more efficient regulator. The SEC can only go after investment scams that violate the Securities Regulation Code and the Commission still does not have the appropriate power to control other cybercrimes that involve digital assets. (Read more: SEC: Law Focusing on Digital Assets Needed)
“The inherent problem with cryptocurrency itself should not be ignored. Crypto remains unusually volatile as an asset class. Due to its decentralized nature, a lack of comprehensive regulation, and the non-transparent qualities of many crypto firms, it is much riskier for investors than equities, bonds, gold, or traditional assets,” Villanueva explained.
To address the concerns of the financial regulators, Binance representatives Leon Foong, Head of APAC, and Kenneth Stern, General Manager for the Philippines, stated that they will aid the Philippines with the development of crypto regulations with their experience working with regulators in other countries and noted that “it is important to focus on a few key elements – AML, KYC, consumer protection, creating checks and processes, and working with global experts in creating education to the public to involve them in risks of crypto assets.” (Read more: Binance Participates in Senate Hearing)
“We support the BSP and the SEC as they aim to add clarity and transparency of digital assets, having a streamlined approach to financial services expanding into transactions involving cryptocurrencies,” Stern stated.
To end Villanueva’s speech, he pointed out that the alliance looks forward to having risk-based regulations without stifling innovations for inclusion.
“There must be more clarity on the rules of engagement for emerging technologies such as non-fungible tokens or NFTs, NFT marketplaces, decentralized finance, and exchange-traded funds or EFTs, among others. Both the BSP and the SEC may implement stricter qualifications for the management and licensing of digital assets exchanges with the goal of better protecting retail investors and promoting massive consumer education,” he added.