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Philippines Allowing Crypto in Economic Zone

Philippines Allowing Crypto in Economic Zone 101
Source: iStock/Pawel Gaul

The Philippine government will allow 10 blockchain and cryptocurrency companies to operate in the Cagayan Economic Zone to take advantage of tax perks while generating employment, Reuters reported.

These companies will be the first crypto firms to operate in the Philippines after the Cagayan Economic Zone Authority (CEZA), a state-owned corporation, established a fintech hub with the goal of creating an Asian “Silicon Valley” back in February. Neighboring countries, in contrast, would not have allowed such entities.

Raul Lambino, chief of CEZA, told Reuters, “We are about to licence 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans. They can go into cryptocurrency mining, initial coin offerings, or they can go into exchange,” adding that they should refrain from exchanging fiat to crypto and vice versa to avoid infringing Philippine regulations; these exchanges should be done offshore.

CEZA will require the companies to invest at least USD 1 million over two years and pay up to USD 100,000 in licence fees. Lambino added that CEZA is also looking to build a blockchain and fintech university to provide skilled employees for the new companies.

The Philippine central bank, which regulates virtual currency exchanges in the country, has not endorsed the use of any cryptocurrency, saying it is open to misuse. Earlier this month, the Securities and Exchange Commission (SEC) of the Philippines issued an advisory on cryptocurrency Cloud Mining contracts, demanding that they be classified as securities.

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