The Philippines’ financial regulator, the Securities and Exchange Commission (SEC), has delayed the introduction of a legal framework for the crypto industry. The initial plan to publish the framework in late 2022 has been pushed back, but the SEC chairman, Emilio Aquino, remains optimistic that the guidelines might be released by the end of 2023.
Aquino emphasized the importance of thorough examination, stating, “We haven’t closed the door. We really just have to make sure people don’t get burned.” The decision to delay the framework came in the wake of the collapse of the FTX exchange, prompting regulators to study the underlying causes and design measures to safeguard investors’ interests.
Collaborating with the University of the Philippines Law Center (UPLC), the SEC has been actively working on guidelines for digital assets since early 2023. While the Implementing Rules and Regulations of Republic Act No. 11765, signed into law in 2022, lacks specific references to “crypto” or “blockchain,” the SEC’s partnership with UPLC indicates their commitment to address the growing importance of digital assets in the country.
The pressure on the crypto industry in the Philippines has been mounting. Both the central bank and the SEC have been urging citizens to avoid engaging with unregistered or foreign crypto exchanges, highlighting the potential risks associated with such platforms. Recent actions by the SEC classified Gemini Derivatives as an unregistered security product under national law, further emphasizing the regulatory focus on investor protection.
Despite these regulatory challenges, the Philippines remains an attractive destination for crypto enthusiasts. With a thriving economy and over 11.6 million Filipinos embracing digital assets, the country currently ranks 10th globally in terms of crypto adoption. This growing interest in cryptocurrencies underscores the significance of establishing a comprehensive legal framework that balances innovation and investor safeguards.
While awaiting the release of the regulatory framework, stakeholders in the Filipino crypto sector should continue to prioritize compliance, transparency, and responsible practices. Investors and market participants can expect the forthcoming guidelines to provide clarity and establish a robust regulatory framework that aims to protect their interests, foster innovation, and maintain the country’s position as a leading player in the global crypto landscape.
As the SEC continues its evaluation and refinement of the crypto framework, market participants should remain vigilant, adapting to evolving regulations and ensuring adherence to compliance standards. The forthcoming guidelines hold the potential to shape the future of the Filipino crypto industry, fostering an environment conducive to sustainable growth and enhanced investor confidence.