Cryptocurrencies Could Be Used For Terrorism Financing – Philippines Central Bank Governor

News, Regulation | June 12, 2019 By:

The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, said that it will continue to address the risks brought about by the growing use of cryptocurrencies in the country.

BSP Governor Benjamin Diokno said in a statement that he is not fully convinced about the use of cryptocurrencies in the country since they could be used to fund terrorism.

“I think that is my view,” Diokno said. “So we will go easy on that. We have to make sure that any technology that will be introduced in society is safe for the Filipino people.”

During a recent launch of a book about bitcoin, Diwa Guinigundo, the deputy governor of the BSP, criticized the potentials of cryptocurrencies to function as a unit of account, medium of exchange, and store of value. According to Guinigundo, “Bitcoins are limited in use at this points, value is very volatile.”

Regarding blockchain technology, Guinigundo said that the technology can be useful for payment and settlements for peer-to-peer transactions and therefore, could potentially bypass the banks and banking system in general.

“For this reason, game theory dictates possible dysfunction when there is a market breakdown, when everyone may distrust one another,” Guinigundo said. “There cannot be a total disregard for a central bank or a third party that provides lender of last resort facility. The BSP approaches these new forms of technology based on regulatory sandboxes that would allow the regulator to balance encouraging technology innovation with robust solution and consumer protection.”