ConsenSys’ Global Business Development Lead in the Asia-Pacific Region Aiai Garcia on how The Philippines is staking a claim as a blockchain innovator on a global scale…

“Blockchain” was certainly the hottest topic in the room for all of the 30,000 attendees at Singapore FinTech Festival 2017. Every major bank in the region covered it as an element of their digital transformations. As we enter the next generation of internet-based services, one with less human input and intermediaries involved, we believe Ethereum has the potential to serve as the glue of this Web 3.0 ecosystem.

Developing countries tend to struggle with technology adoption due to developmental and regulatory barriers. In that environment, a sandbox approach will provide regulators a chance to test various innovations while getting the policies and user experience right. The Philippines can be this sandbox for greater Asia.

The Current State of Virtual Currencies in the Philippines

The Bangko Sentral ng Pilipinas (BSP) has always had a favorable attitude towards virtual currencies thanks to the pioneering efforts of early Bitcoin companies Coins.ph , Bloom Solutions , & Satoshi Citadel Industries. While most countries have stalled and continue to debate (or ignore) the issue, the BSP has been swift & timely in releasing its positions, in pace with the growth of cryptocurrencies.

Ron Hose (CEO of Coins.ph) sits on the panel as the only blockchain payments solutions provider on the “Payments for Inclusion” session at the Deloitte Stage at SFF2017

Today, the Philippines has one of the most advanced blockchain payments apps in the world (Coins.ph), which provides 1.5 million Filipinos alternative access to their finances and other value-added services. Filipino regulators were also amongst the first to announce the regulation of bitcoin as a security.

Continuing the BSP’s national strategy for financial inclusion, the central banks of Singapore & the Philippines announced at SFF2017 that they would collaborate on financial technology by employing the regulatory sandbox approach. This will provide industry stakeholders with the room & time to experiment before regulators enact potentially restrictive policies that could stifle innovation & growth. As part of the agreement, the central banks will share resources, best practices, research, and collaborate to “elevate financial innovation” in both economies.

What does this mean for FinTech & Blockchain in the Philippines?

Singapore is already a favored destination for FinTech start ups (especially blockchain companies) due to the city-state’s tax-friendly incentives, government funding, and support. I expect the Philippines to soon follow suit and open its doors for companies with new technology to experiment in the country. The ultimate north star of these initiatives: To better address financial inclusion for the 70% of Filipinos who are unbanked & underbanked.

The central bank partnership also moves the country one step closer to seeing a “Peso-backed, cryptographic money issued on smart contracts, living on a shared, permissioned decentralized ledger”, with exposure to the MAS & ABS’ Project Ubin. As Project Ubin moves into the next phase and has opened up its source code for central banks to experiment with, I hope to see the BSP joining in the next round of cohorts building a blockchain-based financial system for international real-time settlement and payments.