Cryptocurrency Regulations in the Philippines – A Government Regulated Crypto Space

T
he Philippines has a high level of awareness of crypto as 54% of Filipinos express their interest in investing means of payment for online purchases. The country is among the nations with the largest active crypto community about 2 million people aware of the
cryptocurrencies
and maximum among them have owned.
The Republic of Philippines has emerged as one of the most dynamic Asia-Pacific economies in the world with impressive economic fundamentals. Crypto market is growing despite many ups and downs due to increasing demand and lenience among regulators.
Cryptocurrency ownership is extremely prevalent in the Philippines, instead of using the market for speculation, the Filipino population has turned to cryptocurrencies largely comprising people living in Urban regions, wealthy professionals and people who have the blockchain to send money.
Philippines Crypto Regulation
2022
14-02-2022: Crypto unlikely to become legal tender in the Philippines.
MANILA Philippines is not
expected
to accord legal tender status on crypto even if the country supports its use and policies. The EIU, UK based Economist Intelligence Unit said the Philippines displays the most benign attitude towards cryptocurrency.
23-03-2022: Taxes on digital assets and crypto taking shape soon in the Philippines.
The
patchwork
of new tax rules aiming at collecting revenue from the growing digital asset market creates new risks and obligations for investors and coders. Global investments in digital assets have increased significantly in the past 13 years.
Taxation of Cryptocurrencies
The Bureau of Internal Revenue (BIR) and Department of Finance (DOF) has released statements on cryptocurrencies, the Philippines #1 online tax app “Taxumo ” allows an easy and seamless tax filing online without the involvement of a broker or an accountant.
Cryptocurrencies can only be taxed when they are converted to fiat or some other measurable in fiat, says Atty.Mike. selling and buying of cryptocurrencies to take market’s price fluctuating advantages, the profits earned from these transactions are taxable only when they are converted to fiat, that means only when you sell it for actual Philippine currency of Philippine such as Pesos.
Any gain involving mining is taxable only when the virtual currency is converted to fiat currency. The gain from crypto is considered under income tax after realizing and hence income tax is paid on every quarter rather than paying annually.
The cryptocurrency triggered to be treated as stocks is considered as capital gains tax which will be taxed as other securities and stocks in the country.
VAT the tax applied on goods and services is required to be paid only if the earnings exceed Php 3 million pesos and the lesser will be considered under percentage tax.
Mining of Cryptocurrencies
Cryptocurrency mining
is very popular in the Philippines and cloud mining is operated as one of the businesses in the country. The SEC has enforced securities regulations on the cloud mining operations considering these types of activities as ‘Securities’.
As Bitcoin advances rapidly it is becoming very hard to mine Bitcoin due to its processing power and time. Some people in the Philippines have set up huge warehouses for mining software that makes mining harder. Apart from all this, Bitcoin is still profitable in the Philippines.
The cloud mining operators need to register with the SEC to start its operation in the country. The SEC has issued an
advisory
and warned the cloud mining participants. On the other hand, the biggest bank in the country, Union Bank, showcased
Bitcoin
mining equipment at a business conference.
Historical Events & Announcements
24-08-2021: BIR to go after cryptocurrency deals.
MANILA Philippines tax authorities are now
studying
how to put in place a registry for play-to-earn games in a move to capture the burgoing crypto deals in the country.
15-04-2020:-
The Philippines SEC exposed cryptocurrency scam and warned the investors against a scheme dubbed ‘The Billion Coin’, and notified that they could face a 21-year prison for acting as salesman, brokers, dealers or agents.
21-01-2020:-
The IMF provides technical assistance regarding crypto assets to the Philippines in order to become an important crypto player.
11-06-2019:
– The Central bank warns about the growing cryptocurrency use in the country.
07-08-2018:-
The central bank of the Philippines is considering the possibility of issuing the country’s own digital currency and the impact on the monetary system.
02-08-2020:-
The Philippines SEC
published draft rules
governing token sales and digital currencies. The draft rules provide a road map for the regulations for the token coins issued in ICO.
10-07-2018:-
CEZA issued a provisional license to the first crypto exchange which is based in Hong-Kong. However, the company will be granted with permanent license after they comply with the SEC regulations.
25-04-2018:-
CEZA issued a license to 10 crypto exchanges companies in the country to mark their legal entry into the economic zone.
06-02-2017:-
The central bank regulated cryptocurrencies as ‘legal tenders’ by issuing a
circular
on virtual currency exchanges.
06-03-2014:-
The Central Bank issues a
press release
describing virtual currencies and the risks of buying, holding or trading virtual currencies.
Conclusion
The Republic of Philippines provides a friendly environment for crypto investors and traders with the required regulations and laws. The Philippines is becoming increasingly Crypto-friendly due to a positive approach from the regulatory bodies and the Central bank. T
he Central Bank is registering more and more exchanges and also engaged in various crypto projects. On the other hand, regulatory bodies are actively finalizing crypto guidelines.The country is on the verge of becoming a Cryptocurrency hub of Asia in the coming future to ease the dependability on China.