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SEC,Bangko Sentral working closely on rules for ICO, virtual currency trading

The Securities and Exchange Commission (SEC) is now working closely with the central bank to come up with the rules governing cryptocurrency trading, an SEC official said Tuesday.

The goal is to come up with the final draft covering virtual currency trading and initial coin offering (ICO).

While the Bangko Sentral ng Pilipinas has come up with a circular on virtual currency exchanges, it covers the conversion and transmittal of virtual currencies but not the trading aspect of the transaction similar to a stock exchange, SEC Commissioner Ephyro Luis Amatong told reporters on the sidelines of a forum in Pasay City.

The commission needs to come up with its own rules governing Virtual Currency Exchanges (VCEs) despite the existing BSP circular, Amatong noted.

“When BSP says virtual currency exchange they don’t mean as trading exchange, they mean as money changer license—so wala silang rules on trading,” he said.

“Nakikipag meeting na kami with BSP for joint oversight on virtual currency exchange that involves trading,” he said.

In February 2017, the Bangko Sentral ng Pilipinas issued Circular No. 944 or the “Guidelines for Virtual Currency Exchanges.”

The BSP defines VCEs as “any entity that offers services or engages in activities that provide facility for the conversion or exchange of fiat currency to virtual currency or vice versa.”

VCEs must register with the central bank as remittance and transfer companies.

The SEC said the final rules governing registration of initial coin offerings (ICO) and VCEs will be out before the end of 2018.

“Definitely, we are going to come up with the ICO rules and regulations and hopefully the virtual currency exchanges regulations before the end of the year,” SEC chairperson Emilio Aquino told reporters on the sidelines of the 5th SEC-Philippine Stock Exchange Corporate Governance Forum.

In an earlier text message to GMA News Online, SEC spokesperson Armand Pan said the public consultation on the draft rules ended on September 30.

“But the SEC will still accept comments beyond that deadline ... until the final rule is issued,” Pan said.

In August, the SEC released its draft rules on ICOs which required startups conducting ICOs to register their tokens or virtual currencies with the corporate regulator

The SEC defines ICOs as “distributed ledger technology fundraising operations involving the issuance of tokens in return for cash, other cryptocurrencies or other assets.”

The draft VCE rules will soon be made public for comments, Pan said.

“The target is to issue the final rules on both ICO and VCE within this year,” the SEC official said.

The world's first cryptocurrency, bitcoin, is marking 10 years of existence this month.

Bitcoin is currently worth about $6,400 per unit from a starting point of virtually zero. The idea for the cryptocurrency was for "a purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution," according to a report by Agence France-Presse. — VDS/BM, GMA News