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Philippines to allow cryptocurrency business in special zone

The Cagayan Economic Zone Authority is establishing a special economic area and are excited to “license 10 platforms for cryptocurrency exchanges” in hopes of creating an ‘Asian’ version of Silicon Valley.

The government in the Philippines has expressed that ten blockchain and cryptocurrency companies will be allowed to function in a special economic zone, according to a report from Reuters.

Chief of the Cagayan Economic Zone Authority (CEZA) – the organization implementing the demarcated economic area – Raul Lambino said that they are “about to license 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans”.

He continued that the companies “can go into cryptocurrency mining, initial coin offerings, or they can go into exchange”.

In comparison, other neighboring countries have not allowed enterprises in cryptocurrency-related business to operate and these ten companies will be the first to function in the Philippines following regulatory authority granting permission for their entry into an economic zone in February.

Lambino has said that while the companies are allowed to operate in the area it is noted, in order to avoid infringing on Philippine regulation, that the exchange from cryptocurrency to fiat money (such as the US dollar or GB pound) or from fiat to crypto should be done offshore.

One of CEZA’s primary goals is to transform the Cagayan Valley into the Asian version of ‘Silicon Valley’ by establishing a financial technology hub. Lambino has said that this will happen through the creation of an unmatched “technological” environment.

In order to operate, the companies are expected to invest at least $1 million USD over the course of two years and will have to pay up to $100,000 USD in licensing fees. Since the businesses will be receiving unusual tax breaks, they are also expected to create employment opportunities.

To fulfill this, Lambino said that CEZA is hoping to implement a blockchain and financial technology university in the economic zone which will provide skilled workers for the companies and at the same time will be able to offer more job opportunities.

Reports are that the Philippine central bank, which regulates the country’s cryptocurrency and digital currency exchanges, has not sanctioned the use of any cryptocurrency saying that it is open to misuse.