The island nation is increasingly looking into the new asset class. The Philippine Stock Exchange (PSE), for example, wants to allow trading in cryptocurrencies. Its citizens have been interested in it for quite some time, and blockchain games in particular are enjoying great popularity.
The Philippine Stock Exchange (PSE) should be the primary exchange platform for crypto assets, President and CEO Ramon Monzon told CNN on Friday. The idea was broached during a management meeting two weeks ago. One of the reasons given by the CEO for his approach is that PSE already has the necessary infrastructure for crypto trading.
Even more important is the fact that the exchange also meets the requirements in terms of security measures and investor protection. This is especially essential for a product like crypto trading.
Growing interest in the asset class
Monzon admits that the growing interest in cryptocurrencies has motivated the Philippine Stock Exchange to accept cryptocurrencies as an asset class. However, in doing so, he also stressed that he believes the asset class lacks fundamentals and that the volatility of the markets attracts most investors. Moreover, cryptocurrencies are not issued by a central authority - which can complicate regulation.
The PSE said cryptocurrencies are an asset class that the Philippines can no longer ignore given the rising interest. Now, the exchange is waiting for feedback from the country's SEC so it can proceed. However, it is unclear what the regulator's decision will be, even though the government has stepped up its efforts in the crypto space.
Philippines' stance on cryptocurrencies
The Philippine government is not entirely opposed to cryptocurrencies, but like most governments, is concerned about investor protection and possible fraud. The country has taken a number of steps to become more involved with cryptocurrencies - including the possible introduction of a central bank digital currency (CBDC).
In January, the Philippines' central bank began to rethink how it regulates cryptocurrencies. Its goal was to encourage innovation while limiting risks for potential investors. Thus, the central bank announced that it would treat all crypto transactions as remittance services. At the same time, a CBDC test run was announced, but there is no further information on the project yet.
Citizens earn crypto tokens through play
in 2020, the Philippines recorded about 16 percent of all mobile game installations across Southeast Asia. This makes them the fastest growing market in terms of mobile video games. The blockchain game "Axie Infinity" is among the most popular and recorded user records during the pandemic.
The game, developed by SkyMavis, lets users breed digital pets called "Axies" and fight each other. A game currency called Small Love Potion (SLP) is earned in daily tasks, playful adventures or arena battles. These tokens are portable NFTs, which in turn can be sold on crypto exchanges like Binance or Uniswap.
The phenomenon, which began last summer, exploded in recent months. Nearly 60,000 people are now playing Axie Infinity - a large portion of whom are from the Philippines. That's because the rewards in the form of crypto-tokens may be mere pocket money in the Western hemisphere. But in the Southeast Asian island nation, thousands of players earn their monthly wages from it.