Crypto exchange boom boosts Philippines earnings 52% higher than 2017
Offshore cryptocurrency exchanges and blockchain firms have helped the one of the Philippines’ major economic areas to post higher revenues in a single quarter than was produced in the entire of 2017.
Part of Luzon island, around 250 miles north of the capital Manila, the Cagayan Economic Zone faces outwards to Taiwan and Singapore and traditionally has been a logistics hub for shipping and agro-industrial businesses based around the seaport of Aparri.
CEZA, The Cagayan Economic Zone Authority (CEZA), is a government-owned body promoting the financial health of this area, which operates as a separate customs territory to the rest of the Philippines – similar to Hong Kong and China. Interestingly, CEZA has posted Q2 2018 earnings of ₱340m ($6.3m) on July 24th, a significant boost on what it managed in the same period of 2017. That boost is, we’re told, largely based around 25 companies that have applied for its crypto exchange licence, called the Financial Technology Solutions and Offshore Virtual Currency (FTSOVC).
Each company has to give the CEZA an “investment commitment” of $1m to apply for the licence, which affords them the right to set up offices in the Manila metro area for now, before they eventually move to a new 10-hectare fintech business park in Cagaya once it is completed in 2020. As part of the deal, the economic zone will take 0.1% of every transaction generated by licensed companies.
CEZA CEO Secretary Raul L. Lambino handed the first official licence – which, according to the Manilla Times, will see exchanges subject to strict financial audits and “integrity checks” – to Golden Millenial Quickpay in June.
Golden Millenial is a Hong-Kong based financial group which runs the GMQ Coin Exchange, trading in Bitcoin, Ethereum, Litecoin and QPC, GMQ’s in-house cryptocoin. Two other of the firms that have applied have been given provisional six-month FTSOVC licences: Ultra Precise Investments Ltd and Liannet Technology Ltd, awarded on July 27th.
12 other fintech and offshore cryptocurrency firms have fully paid their licence fees and are waiting for the official word to start operating, CEZA say. According to government figures CEZA stands to earn ₱3.5bn ($65.6m) in total from awarding the licences.
The hope of authorities is that blockchain and cryptocurrencies will help to create an “Asian Silicon Valley” and create around 20,000 jobs for the area, Lambino said in a speech to the Amertime International Blockchain Summit in June.
Other blockchain firms which have already paid the fees to set up in CEZA include Tanzer Inc., the Sino-Phil Economic Zone Agency, Hong Kong Yuen Shing-Hong Ltd and Formosa Financial Holdings.
Hachiman Technology, Changwei International and the Asia Pacific Blockchain Association are among the firms waiting for their licence to be granted.