The IMF made the recommendation in a Technical Assistance Report paper, released Dec. 30, 2019, and based on data from the Fund’s Monetary and Financial Statistics Mission in the country in July 2019.
IMF mission recommendations
According to the report, the IMF’s Philippines mission delivered a lecture on the treatment of crypto-assets in macroeconomic statistics at the request of the Bangko Sentral ng Pilipinas (BSP) earlier this year. Summarizing the mission’s lecture, the report notes that:
“The Philippines may become an important market for crypto-assets, as the BSP recently authorized operations for three more virtual currency exchanges (VCE), bringing the total number of approved VCE to 10.”
Given this growing number, the IMF mission encouraged the central bank to start exploring the possibility of collecting data on these crypto exchanges for its macroeconomic analysis, particularly in regard to international financial flows using crypto assets.
The mission proposed that the BSP requests aggregated data on gross transactions from the exchanges on a quarterly basis.
The data should indicate both the country of origin and destination of the funds transacted, it noted and would be most useful if it were broken down to reveal the parties involved in transactions between individuals, financial and non-financial corporations.
The BSP’s mixed signals
BSP has required domestic crypto exchanges to register as remittance and transfer companies and implement specific safeguards — covering Anti-Money Laundering, Countering the Financing of Terrorism, risk management and consumer protection — since February 2017.
In June 2019, BitMEX Ventures invested in the BSP-licensed the Philippine Digital Asset Exchange (PDAX), and in July, the BSP gave two further crypto exchanges — Virtual Currency Philippines, Inc. and ETranss — the green light to convert Philippine pesos into virtual currencies.
Notwithstanding these positive developments, the BSP’s governor has also robustly warned against the potential use of cryptocurrencies for the financing of terrorism and stressed that the central bank continues to closely monitor their use in the country. He added that “there cannot be a total disregard for a central bank or a third party that provides lender of last resort facility.”