Japanese Minister Naokazu Takemoto and Philippine Cabinet member Raul Lambino of Crypto Valley of Asia recently met to discuss Asian countries’ crypto regulations. They urge the Philippine Congress to introduce legislation on cryptocurrencies and security tokens, calling for cooperation among Asian countries.
Officials From Japan and Philippines Discuss Crypto Regulations
Naokazu Takemoto, Japanese Minister of State for Science and Technology Policy, visited Manila last week to meet with Secretary Raul Lambino, administrator and CEO of the Cagayan Economic Zone Authority (CEZA), local media reported Saturday. The two officials discussed the future of fintech businesses in both countries and the Asian region, especially those related to cryptocurrencies, blockchain technology, and security tokens. According to the Manila Bulletin:
Japanese Minister Naokazu Takemoto and Secretary Raul Lambino of CEZA urge Philippine Congress to write laws on security tokens, cryptocurrencies, and other financial technologies.
CEZA is the government agency responsible for managing the Cagayan Special Economic Zone and Freeport, located at the northeastern tip of the country, surrounded by the waters of Balintang Channel, China Sea, and the Pacific Ocean. Lambino was appointed member of the Philippine Cabinet by President Rodrigo Roa Duterte on July 5, 2017. Takemoto has been serving as Japan’s minister of state for science and technology policy since Sept. 11, 2019.
Security Token Offerings and Cooperation Among Asian Countries
While the Philippines currently has no law covering security token offerings (STOs), Japan is expected to revise its Payment Services Act in April to include this fundraising method, which the two officials discussed in detail.
“This digitalization is expected to enable people who could not participate in the investment process to make small-scale investments,” Minister Takemoto explained. “STO is now becoming a worldwide funding method of financing, but the STO market in Asia, including Japan, has just begun to develop.” Furthermore, “To achieve the philosophy of enhancing financial markets and enriching the economy by using technologies to benefit the entire population,” the Japanese minister asserted:
Cooperation between financial systems and technologies among Asian countries is essential and must be considered.
STOs have attracted worldwide attention, including in Japan. Five major Japanese financial institutions — SBI Securities, Kabu.com Securities, Daiwa Securities, Nomura Securities, and Rakuten Securities — established the Japan STO Association in October 2019.
New Laws Needed
Security token platforms are able to set up shop in the Philippines’ Cagayan Special Economic Zone and Freeport. CEZA currently has 25 principal Offshore Virtual Currency Exchange licensees from Europe and Asia. Among them is a Japanese security token exchange called Allex. According to the Manila Bulletin, the platform’s tokens comply with Japan’s KYC and AML standards. However, even though security tokens are issued inside the Philippines, the country cannot benefit from them due to the lack of relevant laws, Lambino pointed out, claiming:
Congress needs to enact laws surrounding STOs and virtual currencies and appoint a particular government agency to have jurisdiction to supervise the implementation of this.
Lambino opined that without appropriate laws, CEZA “will end up being a mere host for back offices or business processing office (BPO) for foreign fintech companies while all the buying, trading, and offering payments will be done offshore.”
Allex now helps train Philippine blockchain developers on how to create security tokens. Secretary Lambino believes there is an urgent need for regulations that would help the Philippines become more competitive in this field. Referring to security tokens, he elaborated:
This matter is unstoppable. It’s now being practiced and accepted by many jurisdictions, including the U.S.
CEZA has built the Crypto Valley of Asia in a joint initiative with private developer Northern Star Gaming and Resorts Inc. Efforts are underway to build an airport for the crypto valley.
Meanwhile, the country’s central bank, Bangko Sentral ng Pilipinas (BSP), has authorized 13 crypto exchanges to operate in the country. Companies wanting to sell securities to Filipinos or exchange tokens into fiat currency must be registered with the BSP or the country’s Securities and Exchange Commission. Recently, the authorities in the Philippines, including the central bank, had technical help from the International Monetary Fund (IMF) including in the area of crypto assets.
Do you think Asian countries need better crypto regulations? Should they cooperate for better crypto oversight? Let us know in the comments section below.
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Images courtesy of Shutterstock and the Manila Bulletin.
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