Crypto Regulation US Philippines - The collapse of some of the titans of the cryptocurrency sector and the accompanying consequences last year are giv
Crypto Regulation US Philippines – The collapse of some of the titans of the cryptocurrency sector and the accompanying consequences last year are giving the sector as a whole a much-needed wake-up call. Hundreds of billions of dollars have been lost to companies including Celsius Network, BlockFi, Voyager Digital, Genesis, and FTX during the past year. Most recently, the infection has expanded to the financial institutions that deal with cryptocurrencies, with Silvergate, SVB, and Signature banks all falling within a week.
After these incidents, It is more certain than ever that effective regulation is essential for the survival of this industry and is the only means of preserving the confidence of customers who use crypto exchanges to learn more about the world of digital assets.
The FTX enterprise, owned by Sam Bankman-Fried, experienced one of the largest crashes. FTX’s claim that it welcomes regulation was just a facade. Despite its boast of being regulation-friendly, FTX was essentially an offshore exchange that catered to clients from throughout the world. But, there are some companies that, in the nations where we and our clients are physically based, get licenses and are subject to central bank audits to support regulation in practice rather than merely in words.
But in the end, the industry’s receptivity to regulation is only one piece of the problem. Authorities must be prepared to step up and safeguard consumers in their jurisdictions by proactive regulation, rather than only stepping in to clean up after millions of individuals suffer losses due to scams and failed businesses.
The Philippines has made significant strides in regulating cryptocurrencies in recent years, providing a potential model for other countries, including the United States.
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Lessons the US can learn from the Philippines in terms of crypto regulation
Develop a clear regulatory framework
The Philippines was one of the first countries to develop a clear regulatory framework for cryptocurrencies. The Bangko Sentral ng Pilipinas (BSP) released guidelines in 2017 that established clear rules for virtual currency exchanges and required them to register with the BSP. The guidelines also set standards for anti-money laundering and counter-terrorism financing measures.
Foster innovation while mitigating risk
The BSP’s regulatory framework for cryptocurrencies focuses on striking a balance between fostering innovation and mitigating risk. The framework allows for the development of innovative financial products and services using blockchain technology while also protecting consumers and investors from fraud and other risks associated with cryptocurrencies.
Embrace new technologies
The BSP has been open to exploring new technologies, such as blockchain, to improve the efficiency and security of the financial system. The regulator has also launched its own blockchain-based platform for interbank transfers, called the “Philippine Digital Asset Exchange” (PDAX).
Collaborate with industry stakeholders
The BSP has worked closely with industry stakeholders, including virtual currency exchanges and blockchain associations, to develop its regulatory framework. This collaboration has helped to ensure that the regulations are practical and effective in addressing the unique risks posed by cryptocurrencies.
By adopting a regulatory framework similar to the one implemented by the BSP, the US can help to ensure that cryptocurrencies are developed and used safely and securely, while still allowing for innovation and growth in the industry.