Blockchain Unit Formed By Philippines Central Bank

Blockchain, News, Regulation | August 7, 2018 By:

The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has formed a new blockchain and FinTech unit to monitor and regulate registered financial institutions that offer electronic products and services.

In an event focused on the country’s payments and settlements system, BSP Governor Nestor Espenilla Jr. said that a unit, called Financial Technology Sub-Sector (FTSS), has been created “to conduct the effective oversight of FinTech and other innovative alternatives,” such as blockchain. The FTSS will be headed by Vicente de Villa III.

“An efficient retail payment system has the potential to transform the economy through the efficiency it brings to business transactions and the savings generated from a shift from paper-based to digital instruments,” Espenilla said.

De Villa said the FTSS will consist of two divisions. The first, called the Payment System Oversight Department, will be in charge of overseeing the implementation of the National Retail Payment System (NRPS), the central bank’s own effort to widen the use of electronic payments in the country. The second division is the Core Information Technology Specialist Group, which conducts information technology (IT) supervision and examination of banks and non-bank financial institutions, including payments systems.

“We are still overseeing banks, but banks and technology nowadays have to come hand-in-hand,” De Villa said. “There’s an outsourcing that takes place and we have to make sure that these outsourcing services are governed by our rules and regulations.”

The central bank said it has committed to embrace digital solutions by welcoming blockchain and Fintech firms, with the goal of raising the share of e-payments to 20 percent of total transactions by the year 2020. To date, the National Retail Payment System has led to the creation of two automated clearing houses, PESONet and InstaPay, which both facilitate electronic fund transfers.

Last month, the BSP announced that two crypto firms, ETranss and Virtual Currency Philippines, have been given the green light to operate crypto exchanges in the country, which bring the total number of accredited crypto exchanges to five.