After hemming and hawing in its strange relationship with cryptocurrencies and the businesses they imply, the Philippine government decided to make room for a set aside economic zone. The scheme is offered in hopes of generating more tax income, employment for its people, and perhaps a dedicated crypto university.
Philippines Allows Crypto Companies to Operate Economic Zone
Cagayan Economic Zone Authority (CEZA) spokesman Raul Lambinos told Reuters, “We are about to licence 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans. They can go into cryptocurrency mining, initial coin offerings, or they can go into exchange.” Exchanges providing onramps to the nation’s fiat money, on the other hand, are encouraged to launch offshore to avoid running afoul of Philippine law.
Such zones offer advantageous tax regimes in the hope of creating more employment for Filipinos. Early this year, the country legalized such zones for crypto, which appears to be more welcoming to digital assets than other countries in the region.
Local authorities estimate over two years crypto companies will invest more than $1 million, with ten percent of that going toward building a tax base. Ambitious plans also include a possible blockchain-based financial technology university to help feed workers to surrounding businesses in the zone.
A Strange Relationship with Crypto
The government appears to be responding to popular sentiment regarding cryptocurrency, as it has not been very supportive of late: its Philippine National Police arrested bitcoiners, accusing them of running a Ponzi scheme, and the country’s Securities and Exchange Commission came down against cloud mining, asserting such contracts are too close to securities.
And, as we wrote recently, opposition “leader senator Leila M. de Lima thinks that the legislative chamber needs to prioritize Senate Bill 1694, a proposal she filed a month ago. The recent Ordonio Ponzi scheme has compelled her to call upon her colleagues.’I hope that this occurrence will push my esteemed colleagues in the Senate to take my proposed bill seriously and help pass it into law soon.’”
Slightly before that, the SEC “revealed to the public that it plans to enforce securities regulations against cloud mining operations. According to the SEC’s statement, the regulatory agency believes these types of contracts should be defined as ‘securities,’” as reported.
Acceptance, however, of an economic zone for crypto is a positive first start for the industry, and might signal a slight change of heart on the government’s end.