Business 1 August 2018

Ed Drake

Philippine economic zone sees strong demand for crypto licenses

The Cagayan Economic Zone Authority (CEZA) has welcomed strong demand for its cryptocurrency licenses, particularly from international operators in a way that has “surpassed all our expectations,” according to the group’s administrator.

CEZA, which operates the Philippine government-owned Cagayan Special Economic Zone (CSEZ), expects to receive as much as $68 million in licensing revenue, with 17 firms already having paid in full to be licensed to operate cryptocurrency businesses there. According to CEZA, a further 19 firms have expressed interest in securing a Financial Technology Solutions and Offshore Virtual Currency (Ftsovc) license.

The license allow companies “to establish a financial tech, crypto, and blockchain office” within the CEZA area, and provides a certain legal structure for regulation and oversight.

CEZA administrator and CEO Raul Lambino said the robust interest had overshot their forecasts, with as many as 19 firms in the ‘pipeline’ to secure licenses to operate there.

“[Seventeen] fintech and offshore virtual currency firms have already paid in full the application and license fees for the digital coin trading under CEZA…19 companies are in the pipeline to pay their application and license fees to CEZA,” Lambino said, according to the Philippine News Agency.

According to internal forecasts, CEZA expects the licensed cryptocurrency sector to lead to as many as 20,000 jobs, as well significant revenues from the Zone Authority.

In a press statement to local news, Lambino confirmed that the licensing regime would increase CEZA revenues by as much as 50% from 2017’s figures, saying: “[CEZA] has earned more than P200 million [~$3.7 million] from offshore financial technology firms to raise its total revenues to at least P340 million [~$6.4 million] by the end of the second quarter of the year.”

“Ceza expects to earn some PHP3.6 billion (~US$68 million) from the issuance of Ftsovc licenses, on top of the 0.1 percent share for every transaction value of registered digital coin exchanges,” Lambino said.

The announcement of these figures coincides with rumours that CEZA has been considering launching its own cryptocurrency. However, this has been dismissed as untrue by employees of the body, and remains unconfirmed through official channels.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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