THE BANGKO SENTRAL ng Pilipinas (BSP) is working on regulations to tighten oversight on cryptocurrencies as a part of efforts to discourage crimes involving dirty money.
BSP General Counsel Roberto L. Figueroa said they plan to issue regulations that may complement the Anti-Money Laundering Act (AMLA).
“It’s been discussed several times how else we are able to make the law… have more teeth,” he told BusinessWorld on the sidelines of a central bank event on Friday.
“But at the identical time, you already know, these are latest technologies,” he added. “When the AMLA was enacted into law… I mean, no person was even serious about cryptocurrency (back then), right? So, definitely, there are ongoing discussions about issuing regulations to cover (them).”
Last month, a former lawmaker linked to the flood control corruption scandal allegedly used cryptocurrency to maneuver billions of pesos from the country to overseas.
Mr. Figueroa noted that authorities are struggling to trace financial crimes involving cryptocurrencies as its user data is treated with confidentiality.
“The issue with crypto is how are you going to… find it,” he said. “It’s like anonymous — you’ll be able to’t tell who owns it, who sent it and who received it?”
The Anti-Money Laundering Council (AMLC) said last yr that it was pushing amendments to the AMLA, including tighter monitoring of virtual asset service providers (VASP), in a move to maintain the Philippines off the Financial Motion Task Force’s list of nations with dirty money risks.
It also sought to align its regulations with international standards on anti-money laundering and countering the financing of terrorism.
The BSP has several regulations on virtual assets (VA), corresponding to Circular No. 944, or the rules for virtual currency exchanges, and Circular No. 1108, which outlines guidelines for VASPs.
Asked in the event that they plan to implement further regulations to handle anonymity issues, Mr. Figueroa said: As we learn more about (the) technology that we are able to use to give you the option to… penetrate that anonymity, then definitely a regulation may be issued.”
Nevertheless, the BSP official noted that they’ve yet to find out when they may roll out the regulation.
Based on the AMLC’s latest National Risk Assessment, VAs and VASPs within the country have medium to high vulnerability to money laundering risks.
“Inherent vulnerability is ‘high’ as a result of the anonymity and speed of VA transfers, including exposure to DeFi (decentralized finance) platforms, 24/7 availability, peer-to-peer transactions, transfers to/from unhosted wallets, and use of anonymity-enhancing features that enable rapid settlement,” in response to the report.
VAs, corresponding to cryptocurrencies, confer with a kind of digital unit that may be traded, transferred, or used for payments and investments.
Meanwhile, VASPs are entities that handle the exchange of VAs for fiat currencies, in addition to transferring or safeguarding them. — Katherine K. Chan