It has been announced that the Cagayan Economic Zone in the Philippines is about to grant licenses to 10 cryptocurrency and blockchain exchanges so that they can conduct business there.
The exchanges, from Japan, Hong Kong, Malaysia, and South Korea, according to CEZA chief Raul Lambino, “…can go into cryptocurrency mining, initial coin offerings, or they can go into exchange.” According to Reuters, there is, however, a stipulation that trading between fiat currencies and cryptocurrencies must take place offshore
The Cagayan Economic Zone Authority
The Philippines started developing Special Economic Zones (SEZ) in the mid-1990s in order to promote investment, including foreign direct investment (FDI). Over the past 22 years, Philippine SEZs have become a magnet for FDI, especially in attracting manufacturing investment. The Netherlands, Japan, Singapore, the US, and, more recently, South Korea, have been the top sources of investment in the Philippine SEZs.
The Cagayan Economic Zone aiming to become Asia’s answer to Silicon Valley has set up a fintech hub this year. CEZA will require companies to invest at least $1 million over two years and pay up to $100,000 in license fees. There are also plans to build a blockchain and fintech university on site to generate a pool of skilled professionals offering employment opportunities with new companies that set up there in the future.
This announcement comes amid government plans to stem the flow of crypto crime in the Philippines with its rapidly growing economy and cryptocurrency boom. Both Cryptocurrency and its underlying technology has received broad public interest in the country of late and financial institutions are increasingly looking for ways of keeping pace with demand.
The 10 companies will become the first blockchain and crypto-related firms to legally operate in the Philippines after regulators legalized their entry into CEZA earlier this year.
Earlier this month, the Securities and Exchange Commission (SEC) of the Philippines issued an advisory on cryptocurrency Cloud Mining contracts, demanding that they be classified as securities.