The Bangko Sentral ng Pilipinas (BSP) has issued a warning on its website against the use of virtual currencies called bitcoins. This was brought about when regulators in Japan began to outline rules on the trading of bitcoin after the Tokyo-based bitcoin exchange MtGox, filed for bankruptcy in the wake of an apparent million dollar digital robbery.
The BSP’s warning reads:
It has come to the attention of the Bangko Sentral ng Pilipinas (BSP) that virtual currencies like Bitcoin are now being exchanged in the Philippines. The public is hereby warned that such exchanges are not regulated by the BSP or by any regulatory authority in the country at this time. Thus, there are no existing regulations which would specifically protect consumers from financial losses if an organization that exchanges or holds virtual currencies fails or goes out of business.
Bitcoin was created by a programmer known as Satoshi Nakamoto sometime in 2008. As a form of virtual currency, it can be used to purchase both virtual goods and real goods through the internet. It is not backed by any commodity like cash, gold or silver.
The value of bitcoins is speculative at best, and set according to one’s ability to exchange them for goods, making the virtual currency risky and volatile. Bitcoin supporters say that it is the future of ecommerce because the value of a bitcoin does not rely on any central bank or government policy. While detractors are quick to point out that since bitcoin is unregulated, it will be a hotbed for illegal activities.
As BSP puts it:
Virtual currencies may be used for money laundering and other illicit activities – Virtual currencies provide consumers with high degree of anonymity and therefore may be used for money laundering and other illicit activities. This illegal use can affect you, as law enforcement agencies may decide to close exchange platforms and prevent you from accessing funds that the platform may be holding for you.
As of this writing, a local online exchange values bitcoin at a buying price of P29,404.83 and a selling price of P26,655.65.