Philippines To Allow Crypto Trading in Economic Zone
Cagayan Economic Zone will license ten crypto exchanges from Asia-Pacific.
The Philippine government will allow 10 crypto exchanges to operate in a special economic zone, Reuters reported on Wednesday.
The virtual currency exchanges will be the first licensed crypto companies in the Asian country and will be able to establish their activity in the northern special Cagayan Economic Zone.
“We are about to license 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans,” Raul Lambino, chief of the Cagayan Economic Zone Authority (CEZA), told Reuters.
However, as crypto-fiat and vice versa trading are not allowed in the country, customers should use outside companies for these types of exchange, CEZA head explains.
Cagayan province, part of Mindanao island/Image`s source: wikipedia.org
Cagayan Economic Zone
Crypto companies can legally operate in the Cagayan Special Economic Zone and Freeport (CSEZF) if they meet some requirements, invest at least USD 1 million over two years and pay up to USD 100 000 in license fees. In return, the enterprises benefit from tax reliefs, based on their investment plan: four to six-year income tax holiday, tax credits for foreign companies, tax and duty-free import of capital equipment.
“They [crypto companies] can go into cryptocurrency mining, Initial Coin Offerings, or they can go into exchange,” Raul Lambino told Reuters.
CEZA plans a blockchain and financial technology university as companies are obliged to hire local people. Cagayan Economic Zone, one of the 380 economic zones in the country, was established in 1995 with the aim to attract foreign investors and to end inequality in the province. Cagayan, part of the second largest Philippine island of Mindanao, has around 3% unemployment rate with half of the employed population working in the low-paid agricultural sector. The region`s minimum wage is around USD 15 daily, according to the Philippines Statistics Authority.
CEZA`s chief Raul Lambino (on the left) speaking to Rodrigo Duterte (in the middle) during President`s visit in the Cagayan Economic Zone, March 14, 2018/Image`s source: gov.ph
CEZA created rules for crypto companies in February after signing a memorandum with Philippine and Japanese companies for the establishment of the so-called “Asian Silicon Valley”. The first Asian-located Special Financial Technology Economic Zone is part of President Duterte`s efforts for recovery of Mindanao after years of violent extremism.
Why the Asia-Pacific countries?
The Philippines move to first license Japanese, Hong Kong, Malaysian and Korean exchanges comes after the country’s Asia-Pacific neighbors tightened their grip on digital currencies.
In 2017, Japan became a global hub for crypto trading because the country was the first to adopt crypto exchange regulations. Also, 16 virtual currency trading platforms registered in the country after China banned cryptocurrency trading and South Korea announced plan for possible outlawing of Initial Coin Offerings (ICOs). However, following the USD 530 million Coincheck hack in January, the Japanese financial regulator (FSA) initiated inspections of crypto exchanges and ordered seven of them to make security improvements, which prompted one of the leading players Binance and OKEx to reconsider their activity in the country.
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