Asian countries seem not to be in favor of cryptocurrency given that India wants to ban the use of cryptocurrency, Russia and China want to place a ban on Crypto mining, and now, the Central Bank of the Philippines has joined the league to warn its citizens against the use of cryptocurrency, according to Philstar’s report on June 10, 2019.
The Philippines Central Bank to Address Risks Associated with Cryptocurrency Use
Per the report, Benjamin Diokno, the Governor of the Philippines central bank, the Bangko Sentral ng Pilipinas (BSP) said the bank will continue to address the risks associated with the growing use of cryptocurrency in the country. In his opinion, these assets serve as a tool for terrorism financing and as such, he is not convinced about their use.
On the other hand, Diwa Guinigundo, BSP’s deputy governor outlined that Bitcoin still has limitations regarding its replacement of fiat as a medium of exchange, a unit of account, and store of value. According to him, the virtual asset currently has limited use and its price is volatile.
BSP’s Deputy Governor Says Blockchain Technology is Useful
Nonetheless, Guinigundo was quick to note that blockchain technology could be useful in the area of payments and settlements for peer-to-peer transactions without the central bank or banking system serving as an intermediary. He, however, noted that this also poses a risk to the traditional banking sector when he said:
“Game theory dictates possible dysfunction when there is a market breakdown, when everyone may distrust one another. There cannot be a total disregard for a central bank or a third party that provides lender of last resort facility.”
Guinigundo also revealed that these new forms of technology are usually approached with regulatory sandboxes in a bid to create a balance between encouraging their innovation and ensuring consumer protection.