The Philippines kickstarts ‘fintech hub’ by licensing cryptocurrency exchanges

Cryptocurrency Features The Philippines
The Phillippines is pushing ahead with its plan to become 'Asia's Silicon Valley' by licensing cryptocurrency exchanges to operate in a designated special economic zone. Photo: Pixabay
Mark Knowles
Written by Mark Knowles

Golden Millennial Quickpay Inc. Limited (GMQ) on Wednesday (July 11) became the first crypto exchange to receive a license to operate in The Philippines’ Cagayan Special Economic Zone.

Two other financial technology (fintech) firms – Ultra Precise Investments Ltd. from Bangkok, Thailand, and Liannet Technology Limited from Hong Kong – also received their Financial Technology Solutions and Offshore Virtual Currency License (FTSOVC) licenses.

However, Senior Deputy Administrator Ray Roquero of the Cagayan Economic Zone Authority (CEZA), the authority responsible for issuing the licenses, made it clear that these first three licenses are only “provisional” and will be monitored closely by CEZA.

Two months after announcing its intention for The Philippines to become a fintech (financial technology) haven CEZA, headed by CEO Raul Lambino, awarded its first license to GMQ – one of 80 fintech businesses that applied to operate in the economic zone.

CEZA is calling the new licenses “Financial Technology Solutions and Offshore Virtual Currency Licenses” (FTSOVC) and awarded its first such license during the GMQ Global Blockchain Summit held at the Sofitel Philippine Plaza Hotel in Pasay City.

Around 100 Chinese blockchain and cryptocurrency related firms, industry experts, and business partners from the government and private sectors joined the summit.

GMQ, from Hong Kong, was one of the first companies to respond to the invitation of CEZA to invest in the economic zone and play a part in pioneering the fintech and offshore virtual currency exchange industry within the “CEZA Fintech Hub” envisioned by the authority.

CEZA’s stated goal in issuing the provisional licenses is to spur economic development within the Cagayan Special Economic Zone and Freeport area, which it controls.

Earlier, Lambino said the agency will initially issue licenses to only 25 of the exchanges which applied through CEZA.

Any cryptocurrency exchanges that wish to obtain a license are required to put in an initial investment of US$1 million (over P53 million), to be payable in two years’ time.

CEZA’s efforts to make The Philippines the “Silicon Valley of Asia” has been attracting the attention of the global crypto-community and in recent times the authority has been closely involved with holding a series of blockchain summits

Lambino, at the Global Blockchain Summit and Inaugural Blockchain Application Exhibition on June 24, also held in Pasay City, expressed confidence in the emerging technology’s economic impact to The Philippines and its citizens.

“Actually, we are going to make money because we are going to charge them for occupying the spaces we constructed,” he said.

In his speech at the summit on Tuesday, Lambino said he was honored to mark the official launching GMQ’s cryptocurrency exchange and fintech solutions business.

“GMQ is a pioneer in CEZA’s venture to establish a financial technology and offshore virtual currency exchange business, which will eventually form the nucleus of the CEZA Fintech Hub,” said Lambino.

More than 20 other cryptocurrency exchanges inline to receive licenses from CEZA and the Hanwha Group of South Korea, a blockchain developer, has signed a Memorandum of Understanding with the authority.

CEZA Senior Deputy Administrator Roquero said the buzz surrounding blockchain technology being warmly welcomed in The Philippines was a result of the authority’s intensified efforts to “really promote this new technology, which is considered as the future of banking and financial transactions in the world.”

He added that “practically the whole of Asia is looking towards The Philippines to invest in this new venture. We call this ‘A New Venture in the Valley Unfolds’, because Cagayan is known for its valleys and hills.”

Roquero said CEZA and its leaders believe the agency is the “perfect venue” for the fintech haven as the fintech enthusiasts and the millennials who drive the crypto industry, prefer a quiet place, which he said Cagayan offers.

He also reassured potential investors that CEZA is “painstakingly screening” applicants to assure that no fly-by-night companies are accepted.

“We only need the established ones, so we can avoid scams,” Roquero said.

Several national politicians also expressed their support for the CEZA Fintech Hub, including Eastern Samar Representative Ben E. Evardone, who congratulated CEZA for its initiative in driving The Philippines’ fintech revolution forward.

“I am glad that they are prioritizing this industry that will revolutionize financial transactions worldwide,” he said.

Pasay City Representative Imelda “Emmie” Calixto-Rubiano welcomed delegates to the summit and assured support for CEZA and all fintech companies setting up in the country, saying “that they can rely on her if they need any help, as well as the House of Representatives”.

Evardone also noted that only two out of 10 households in the country have access to banking services, which is why the blockchain technology offers huge potentials for financial inclusion of over 80 percent of Filipinos.

About the author

Mark Knowles

Mark Knowles

Coinlaw Multi-Jurisdiction Blockchain News
Mark Knowles is the Executive Editor of coinlaw.io
With more than a decade of experience as a journalist and editor, Mark has now turned his focus to the blockchain and cryptocurrency revolution that is currently reshaping the global economy. As Executive Editor at Coinlaw Mark is working to create a website that is a hub for the international crypto community to find the latest legal news, legislative changes and expert opinion from across the industry. Contact him at [email protected] or through mobile on +66 (0) 98 705 2716.

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