Asia Blockchain & Crypto Association To Implement New Crypto Rules In Phillipines February 4, 2019 February 4, 2019
The Philippines is unveiling a comprehensive set of new rules governing cryptocurrencies through the Cagayan Economic Zone Authority (CEZA) in order to effectively regulate and protect investors. CEZA has approved the Digital Asset Token Offering (DATO) rules covering the acquisition of crypto assets, including tokens for utility and security. Under the new framework, CEZA is the main regulatory body. The Asia Blockchain and Crypto Association (” ABACA “) is designated as an SRO (self-regulatory organization) for the implementation and enforcement of new rules.
Sec. Raul Lambino, CEZA administrator and chief executive officer, said “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.”
Under the rules, all DATOs must have documentation with relevant details on the issuer, the project and the accompanying expert advice and certification of DA agents. Tokens shall be shown on the Offshore Virtual Currency Exchange (OVCE) licensed. Stakeholders must also have accredited wallet providers and custodians confirmed arrangements.
The regulations cover three DATO levels. Tier 1 includes assets and investments of no more than $5 million with digital tokens payments. Tier 2 covers an investment of between $6 million and $10 million, while Tier 3 covers an investment of over $10 million.
Utility tokens, also known as app coins or user tokens, will give future holders access to a company’s products or services. In the meantime, security tokens are backed up by real assets like equity, limited partnership shares or commodities. They are used to pay dividends, share profits, pay interest or invest in other tokens or assets to generate profits.
The power of the blockchain and the digitization of securities and assets is seen to have a major long-term impact on the Fintech area. The new DATO rules of CEZA will bring much-needed changes to the industry and encourage innovators to make responsible use of new technologies.
Lambino elaborated as follows “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 said that CEZA has built an OVCE ecosystem that lists tokens of issuers. CEZA and ABACA have also approved wallet providers and assured digital asset custodians to ensure that investor proceeds are properly stored and governed.
As a newly appointed SRO, ABACA will help the government to regulate cryptocurrency companies by transforming industry players into enforcers effectively. The SRO enforces a code of conduct between the members and reports to CEZA any breaches, violations or matters concerning the rules and regulations of the OVCE.
CEZA stressed that cooperation with fintech locator companies and industry players will help the government to gain insights and keep up to date with emerging market innovations. The economic zone authority uses research on national and international business standards to efficiently regulate the under its jurisdiction industries and licensees.
Ma.Juanita Cueto, Chairperson of ABACA said “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.”
The aim of CEZA is to develop the economic zone as the center of fintech companies in Southeast and Northeast Asia. The Economic Zone Authority has already approved and issued provisional main virtual currency exchange offshore licenses to 19 companies in the blockchain ecosystem industry.