The central bank of Philippine’s governor shared his policy regarding crypto regulation in a recent interview.
The governor said that he does not want to see the digital currencies banned and advised investors to only invest money in crypto that they can afford to lose.
Bangko Sentral ng Pilipinas (BSP) is the central bank in the Philippines and its governor, Felipe Medalla talked about his crypto policy in an interview on Friday.
When questioned about crypto, the central bank governor said that he did not wish to see it banned in the country and did not wish to call it cryptocurrency either.
According to the governor, he does not believe that cryptocurrency is suitable as a means of payment because of its extreme volatility.
He said that a currency cannot be volatile when it has to be used for payment purposes, due to which he preferred using the term ‘crypto assets’ to refer to it.
Pros and cons
Medalla talked about the pros and cons of cryptocurrencies in the interview. He slammed bitcoin and others that use the proof-of-work (PoW) mining method for their environmental impact.
He asserted that crypto is not good for the environment because miners consume a huge amount of electricity and the consumption is higher than that of entire countries.
However, he added that it could also be a good thing because countries that are economically or financially repressed can use it as an alternative.
The central banker also said that another thing crypto is useful for is for avoiding monitoring by the government, but he said that it was not clear as to what social good it would achieve.
He emphasized that in countries where the government is working toward the common good, then it is not a good idea to weaken that government, even if it is not perfect.
Therefore, he said he believes cryptocurrency has a very high valuation because of all the issues he had outlined.
Other than regulation and the use of crypto, the Philippine central banker also focused on the downturn that appears to be happening in the crypto market.
He said that this was the crypto bubble collapsing, as a number of crypto assets have lost almost two-thirds of their value and that too in a very short time span.
Thus, he said that he would advise crypto investors to never invest more than they can afford to lose in these assets.
Talking about the crypto policy of the Philippine central bank, Medalla stated that their viewpoint was that crypto should not be used for violating anti-money laundering (AML) and know your customer (KYC) policies.
He added that as far as crypto exchanges are concerned, platforms that allow people to use bank deposits or fiat currency to buy crypto assets, the central bank wants to ensure all rules are implemented.
Their goal is to ensure there are no financial crimes conducted, such as money laundering, with the use of these crypto assets.