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March 10, 2014

Bangko Sentral ng Pilipinas warns public about Bitcoin

With the arrival of virtual currencies like Bitcoin in the Philippines, the Bangko Sentral ng Pilipinas (BSP) has issued an advisory that warns the public about the risks involved in buying, holding or trading virtual currencies.

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BSP warns that exchanges using virtual currencies like Bitcoin 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. Moreover, there is no assurance that the value Bitcoin or any virtual currency would be stable. In fact, its value can be highly volatile. The BSP will be closely monitoring developments on these virtual currencies particularly on their possible use for money laundering and other illegal purposes, and will adopt appropriate measures as needed.”

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The public is advised to research on the internet and other forms of media before getting involved in virtual currencies.

Below is BSP’s list of things to think about before buying, holding or trading virtual currencies:

1. You can lose your money through a virtual currency exchange – Exchange platforms are unregulated. If a virtual currency exchange loses or fails, there is no legal protection that covers you for losses arising from any funds you may hold on the said exchange. At present, there have already been a number of cases where virtual currency exchange platforms have gone out of business or have failed.

2. Virtual currencies in your digital wallet can get stolen – When buying virtual currencies, the same are stored in a “digital wallet,” on a computer, laptop, PC tablet or smart phone. This digital wallet makes use of public and private keys or passwords that allow you to secure your wallet. Still, there have been a number of reported cases whereby consumers lost large amount of virtual currencies from their wallets through hacking. Further, since virtual currencies do not have central organizations that hold and re-issue keys or passwords, losing the key or password to your digital wallet would mean losing your virtual currency forever.

3. You are not protected when using virtual currencies for payment –Payments made through virtual currencies like Bitcoin are immediate, direct and non-reversible. Further, since the use of virtual currencies is not regulated, there are no existing regulations to protect you in case of unauthorized or incorrect debits made from your digital wallet.

4. The value of your virtual currencies cannot be guaranteed and can change quickly – The value of virtual currencies has shown several sharp increases for the past year, and several sharp decreases as well. If you buy a virtual currency today, it is quite possible for its value to drop sharply and permanently the next day.

5. 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.

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You can now buy and sell Bitcoins in the Philippines

9 Responses to “Bangko Sentral ng Pilipinas warns public about Bitcoin”

  1. FUCK THE GOVERNMENT! FUCK THE SYSTEM!

  2. Noynoy Aquino says:

    What does the government know about Bitcoin? They just warn people because they don’t have the law where they can fit their corrupted minds.

  3. Easy E says:

    I agree with the BSP. Napaka-volatile talaga ng bitcoins at wala kang protection sa mga bitcoins na mawawala sayo. May bansa na ba na nagsabing legal currency ang bitcoin? Masaya lang kung nagma-mine ka ng bitcoin. exchange mo kaagad sa cash :D

  4. Boybawang says:

    Is this a Paypal clone?

  5. Hen-Sheen says:

    I would rather play the .Hack games & become a vegetable in the virtual world! Bitcoin? What is that? Is this currency in Bitland or the possible extent Bitworld? How much? 8 Bit? I better tell this to Princess Twilight Sparkle about this whole “Bit” Currency thing… Looks unrealistic and What were they thinking!?

  6. Mon says:

    O_o

    1. off topic, but it’s sad that a LOT of people complain about the government but does absolutely nothing about it… maybe just the complaining part…
    2. Bitcoins ARE extremely volatile but was also serious money, some people made hundreds of thousands of dollars just because they invested several dollars into it back in 2009.

  7. LittleBoyBlue says:

    A problem with BitCoin, which sadly has happened, is the possibility of the people losing money if the company that manages it goes bankrupt. While it may be an isolated case, there should be a way to protect people when the unfortunate event happens.

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