Sunday, January 29, 2023

Philippines Draws Crypto Businesses into a Special Economic Zone

Philippines Draws Crypto Businesses into a Special Economic Zone

The government of the Philippines is taking positive steps toward developing a favorable environment for crypto companies. Ten crypto companies have been given the green light to operate in a specialized economic zone – the Cagayan Special Economic Zone and Freeport ((CSEZFP), where crypto companies can take advantage of tax breaks.

Crypto Companies to Gain Tax Benefits

Recently, opposition Senator Leila M. De Lima created controversy by requesting that the Senate impose harsher penalties on crypto-related crimes. Senator Lima demanded a revision of the law in order to penalize bad actors in the crypto space.

The ten permitted blockchain and cryptocurrency companies will be the first to set up shop in the Cagayan Special Economic Zone and Freeport. According to one government official, crypto entities will enjoy tax benefits by being part of the special economic zone. However, the government expects those companies to generate employment.

Chief of the Cagayan Economic Zone Authority, Raul Lambino told Reuters:

“We are about to license 10 platforms for cryptocurrency exchange. They are Japanese, Hong Kong, Malaysians, Koreans, They can go into cryptocurrency mining, initial coin offerings, or they can go into the exchange.”

The Philippines Aims to Be Asia’s Fintech Hub

In February, reports surfaced that the Filipino government was considering the idea of developing a fintech center in Cagayan province. Soon thereafter, the CAGAYAN Economic Zone Authority and Sinosun Subic Bay Holdings Corp. signed an agreement to develop a special economic zone to attract crypto businesses, offshore banking firms, virtual currency exchanges, and crypto mining companies.

At the time Lambino stated “Several companies all over Asia have approached us and some companies in the US are signifying interest to register as virtual currency platform operators in CEZA.”

The CEZA has developed a regulatory framework, wherein companies must invest $1 million USD over a period of two years and pay licensing fees of up to $100,000. The special economic zone will be home to blockchain and financial technology enterprises. The move was made to promote the Southeast Asian nation as a crypto-friendly country and label Cagayan province as a leading fintech hub. However, the Philippine central bank remains yet to approve of the use of cryptocurrencies as legal tender in the country.

Will the Philippines become a crypto hub in Asia? Share your views in the comments section below.

Images via 

Bitsonline Email Newsletter