The Philippines has the opportunity to be on the cutting edge of the future of money. The expertise for this is not going to be found lecturing on our university campuses. It will not be found sitting in the boardrooms of our largest corporations. It certainly will not be found in the hallowed halls of Congress or in Malacañang.
It is found as the brainchild of a young man in Parañaque, whose 300 computers are running 24/7. You can find it on Philippine social media, where hungry entrepreneurs are discussing how to take advantage of new technologies. Members of the financial market communities are trying to build their expertise and rapidly as possible.
Last month Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. said the Philippines is not yet ready to come up with its own virtual currency. We should be and as quickly as possible.
According to news reports, Espenilla said cryptocurrencies were “actively” discussed by finance officials and regulators during a recent meeting in Washington, D.C. The BSP released its first set of guidelines on cyber currencies earlier this year. Those guidelines first provided approval for the registration of two companies who want to engage in the operation of bitcoins.
Espenilla: “We see the benefit of cryptocurrency in promoting efficient money-transfer services, for example. But we also realize that cryptocurrency can be used for such schemes like money laundering and other criminal activities.” Fair enough. That is one of the tasks of the BSP.
However, the private sector—as usually happens—is ahead of the government learning curve. A private company is currently engaged in bringing to realization what it is calling the “PHLDevCoin” which may be the next step in the use of cryptocurrency. While many companies are now involved in various aspects of ‘mining’ Bitcoin and the like, others are trying to provide avenues for people to be able to spend and use these ‘cryptos’ as everyday money.
But for the time being, people are buying these currencies as a speculative and profitable trading instrument. If you are one of the fortunate ones who has made a few million—literally—buying and holding Bitcoin—where can you directly spend your cryptocurrency?
The United States government regulatory agencies have made it very clear you will be taxed and taxed heavily when and if your crypto profits are revealed. On March 25, 2014, the US Internal Revenue Service ruled that Bitcoin will be treated as property for tax purposes as opposed to currency.
However, recognizing that fact, some companies are figuring out how to have the advantages of the inherent “secretive” world of the cryptocurrencies while being mainstream at the same time. PHLDevCoin intends to provide an investment vehicle for global investors to legally come in to the Philippines using cryptos and invest in both public and private infrastructure and other money-making projects without the limitations and disadvantages of the stock market or establishing a local company.
The BSP and other government financial agencies may soon find themselves faced with the age-old dilemma. “Lead, follow or get out of the way.” While still in its infancy, cryptocurrencies are going to play an increasingly more important part of our financial future.