Philippines issues new rules on acquiring cryptocurrency assets

Philippines issues new rules on acquiring cryptocurrency assets

Self-regulatory organization (SRO) to help enforce regulations, code of conduct

SINGAPORE – Media OutReach – 4 February 2019 – The Philippines, through the Cagayan Economic Zone Authority (CEZA), unveils a comprehensive set of new rules governing cryptocurrencies in a bid to effectively regulate and protect investors.
CEZA has approved the Digital Asset Token Offering (DATO) regulations that cover the acquisition of crypto assets, including utility and security tokens. Under the new framework, CEZA is the principal regulating authority. The Asia Blockchain and Crypto Association (“ABACA”) is designated as a SRO to help implement and enforce the new rules.

“It is our goal to provide a clear set of rules and guidelines that will foster innovation yet ensure proper compliance by actors in the ecosystem. It is our hope that these set of regulatory innovations will take the digital asset sector one step closer to adoption and acceptance by institutions and the traditional financial system,” said Sec. Raul Lambino, CEZA administrator and chief executive officer.

Under the rules, all DATOs must have proper offering documents with pertinent details on the issuer, project, and accompanying advice and certification of experts and DA Agents. Tokens must be listed on the licensed Offshore Virtual Currency Exchange (OVCE). Stakeholders must also have confirmed arrangements with accredited wallet providers and custodians.

The regulations cover three levels of DATO. Tier 1 involves assets and investments not exceeding $5M with payment made in digital tokens. Tier 2 covers $6M to $10M in investments, while Tier 3 covers investments exceeding $10M.

Utility tokens, also known as app coins or user tokens, give holders future access to the products or services offered by a company. Security tokens, meanwhile, are backed by real assets such as equity, shares of a limited partnership company, or commodities. These are used to pay dividends, share profits, pay interest or invest in other tokens or assets to generate profits for the token holders.

The power of the blockchain and digitization of securities and assets are seen to make a big impact on the fintech space in the long run. CEZA’s new DATO rules will provide much needed change to the industry and encourage innovators to use new technologies responsibly.

“The safeguards built into CEZA’s rules and system will lead to greater investor protection and transparency. The involvement of DA agents and experts bring in competent and neutral third parties into the process to help ensure issuers are truthful and accurate,” Lambino explains.

Lambino said CEZA has built an ecosystem of OVCEs where tokens of issuers can be listed. CEZA and ABACA have also approved wallet providers and insured digital asset custodians to ensure proper storage and governance of investor proceeds.

ABACA, as a newly-appointed SRO, will help the government regulate cryptocurrency companies by effectively converting industry players into enforcers. The SRO is enforcing a code of conduct among the members and reports to CEZA any breach, violations, or any matters relating to OVCE rules and regulations.

CEZA has emphasized that collaboration with locator fintech firms and industry players will help the government gain insights and keep up to date with innovations on the emerging markets. The economic zone authority is using research on national and international business standards to efficiently regulate the industries and licensees under its jurisdiction.

“The SRO model allows industry players to police its own ranks, while also promoting and protecting the interests of cryptocurrency investors. The rules will remain stringent in assessing the ethics and integrity of companies eyeing to launch Digital Asset Token Offerings” says Ma. Juanita Cueto, Chairperson of ABACA.

“CEZA is moving forward with its goal to develop the economic zone as the center of fintech firms in Southeast and Northeast Asia. The economic zone authority has already approved and issued provisional principal offshore virtual currency exchange licenses to 19 companies engaged in the blockchain ecosystem industries.About ABACA 

ABACA is a self-regulatory organization (SRO) granted under the authority of the CEZA. ABACA self-regulates the code of ethics and compliance with best practices and industry standards for the financial technology firms operating within, or in affiliation with CEZA and ABACA members.

U.S. Employment Jumps Much More Than Expected In January

A closely watched report released by the Labor Department on Friday showed employment in the U.S. jumped by much more than expected in the month of January, although the report also showed a substantial downward revision to the pace of job growth in December.

The Labor Department said non-farm payroll employment surged up by 304,000 jobs in January compared to economist estimates for an increase of about 165,000 jobs.

However, the report also showed the spike in employment in the previous month was downwardly revised to 222,000 jobs from the initially reported 312,000 jobs.

The Labor Department also said the unemployment rate unexpectedly inched up to 4.0 percent in January from 3.9 percent in December. Economists had expected the unemployment rate to be unchanged.

Meanwhile, the report said average hourly employee earnings rose by 3 cents to $27.56 in January, reflecting a 3.2 percent increase compared to the same month a year ago.

Asian Shares Advance On Trade Talk Optimism

Asian shares rose on Friday after U.S. Treasury Secretary Steven Mnuchin said the United States and China were “making a lot of progress” in talks and he looked forward to discussions with Chinese Vice Premier Liu He next week, with currency issues also on the agenda.

Separately, U.S. Commerce Secretary Wilbur Ross told CNBC on Thursday that the U.S. is “miles and miles” from a trade deal with China but there is a fair chance they will get a deal.

China’s Shanghai Composite index inched up 10.03 points or 0.39 percent to 2,601.72 while Hong Kong’s Hang Seng index finished up 448.21 points or 1.65 percent at 27,569.19.

Japanese shares hit five-week high as chip-related firms tracked their U.S. peers higher following well-received earnings out of the semiconductor sector.

The Nikkei average rallied 198.93 points or 0.97 percent to 20,773.56, the highest closing level since Dec. 19. The broader Topix index closed 0.87 percent higher at 1,566.10.

Sumco Corp jumped 11.6 percent, Tokyo Electron rallied 4.7 percent and Advantest added 4.9 percent on hopes for a recovery in the global cyclical chip sector. Apple suppliers Murata Manufacturing and Alps Alpine rose 5-6 percent.

Nissan Motor gained 2.5 percent after Renault appointed Michelin boss Jean-Dominique Senard as its new chairman.

On the economic front, a government report showed that overall consumer prices in the Tokyo region rose an annual 0.4 percent in January. That was unchanged from the December reading, although it exceeded expectations for an increase of 0.2 percent.

Australian markets rose notably as higher commodities and oil prices helped lift mining and energy stocks.

The benchmark S&P/ASX 200 climbed 39.90 points or 0.68 percent to 5,905.60 while the broader All Ordinaries index ended up 40.60 points or 0.68 percent at 5,971.10.

Mining heavyweights BHP and Rio Tinto rose over 1 percent after iron ore prices rallied overnight. Gold miner Evolution Mining rose 1.1 percent and Newcrest advanced 1.7 percent.

Oil Search, Woodside Petroleum, Santos and Beach Energy gained 1-2 percent as oil extended overnight gains.

Banks ANZ, NAB and Westpac rose between 0.6 percent and 1 percent while wealth manager AMP slumped nearly 8 percent after reporting a near 97 percent drop in its annual profit.

Medical device maker Resmed plunged 12 percent after its top-line result for the second quarter missed analysts’ forecasts.

Seoul markets soared amid a rally in electronic component manufacturers and chipmakers on bets that capacity adjustment from dominant Korean players may help increase demand and boost prices.

The benchmark Kospi jumped 32.70 points or 1.52 percent to 2,177.73. Samsung Electro-Mechanics jumped 10.6 percent, SK Hynix advanced 5.8 percent and Samsung Electronics climbed 4 percent.

New Zealand shares ended little changed, with the benchmark S&P/NZX 50 index ending up 1.64 points at 9,110.55.

Overnight, U.S. stocks fluctuated before ending mixed. The Dow edged down 0.1 percent while the tech-heavy Nasdaq Composite gained 0.7 percent and the S&P 500 inched up 0.1 percent.