Philippines central bank cautions against the advancement of cryptocurrencies

The governor of the Philippines central bank has cautioned against the risk that could emanate from the advancement of cryptocurrency use in the nation. According to The Philippines Star on Monday quoted Benjamin Diokno, the governor of the Bangko Sentral ng Pilipinas saying that the regulatory institution is going to continue monitoring the use of digital assets in the country.

He also warned against cryptocurrencies being used as tools to fund terrorism. The deputy governor of the central bank, Diwa Guinigundo is also reported to have said that cryptos are not up to standard to be used as a substitute to national currencies as mediums of exchange and even for the actual value. Guinigundo commented:

“For this reason, 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.”

In order to properly monitor the risks and impact of digital assets, the central bank prefers the use of regulatory sandboxes.

The use of cryptocurrencies in the Philippines continues to rise despite the warning by the central bank. Crypto transactions in the country have double in the last two years from $189.18 million in 2017 to $390.37 million according to the data from the central bank’s Technology Risk and Innovation Supervision Department.