The Philippines government-owned Cagayan Economic Zone Authority (CEZA) has issued provisional licenses for operating crypto exchanges to nineteen firms. Eight more firms paid entrance fees and are under consideration. CEZA manages the development of the Cagayan special economic zone in Cagayan Province, Northern Luzon, Philippines. It should become a self-sufficient industrial, commercial, financial, tourist and recreational center for the effective attraction of local and foreign investment.
At the moment, 19 companies have received temporary licenses. CEZA issued 17 provisional principal licenses and two provisional regular licenses. These two types of licenses are different. Provisional principal licenses allow licensees to conduct offshore financial technology solutions, business activities, and offshore virtual currency exchange activities. While provisional regular licenses allow companies to conduct offshore virtual currency exchange activities. CEZA published a list of all companies that have been issued Financial Technology Solutions and Offshore Virtual Currency (Ftsovc) and Offshore Virtual Currency (Ovc).
Initially, it was known that only 25 trustworthy cryptocurrency exchanges would receive residence in the Cagayan special economic zone of the Philippines. CEZA issues licenses to sites whose activities do not contradict the current cryptocurrency legislation of the country. Also, crypto exchanges, having an office in a special economic zone, will have to invest at least $1 million into it within two years. Each of the 25 crypto platforms will receive the right to issue up to 30 trading and brokerage sublicenses.
In July, CEZA announced that it had issued the first 25 licenses to Hong Kong crypto exchange Golden Millennial Quickpay Inc. Ltd. Total Office received 70 applications from companies, and six of them have already paid a license fee. The Cagayan Economic Zone Office also announced that it intends to earn $67 million (3.6 billion pesos) to issue licenses to crypto exchanges. A principal license for Financial Technology Solutions and Offshore Virtual Currency (Ftsovc) operation under CEZA is priced at $360.000, while a regular license is at $85.000.
The Philippines is one of the first countries in the world to define the legal framework for cryptocurrency exchanges. The Philippine central bank (BSP) is considering a lot of applications for the opening of crypto exchanges in the country, not only in the Cagayan economic zone but also abroad. Representatives of the country's central bank believe that the country has become one of the pioneers of crypto regulation. Although initially, the BSP declared its opposition to cryptocurrency, emphasizing the impossibility of guaranteeing consumer protection in the event of financial losses. But later the watchdog softened its position.
Crypto trading platforms were classified as companies specializing in the provision of monetary intermediation services. The BSP believes that these are necessary measures to combat the legalization of illegal capital and the maintenance of financial stability.
In August, the country's Securities and Exchange Commission (SEC) published rules governing the ICO sphere. The regulator is confident that all tokens should be considered securities until their issuers prove otherwise. The government noted that the majority of local ICO organizers claim that they do not fall under SEC regulation. Now the organizers of the ICO will have to submit an application for an initial assessment of the assets before their release at least 90 days before the issue. Then the agency will submit a report on the nature of the token, its release can be made only with the approval of the regulator.
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