Following the recent breaches of SWIFT and the Federal reserve, a Philippine senior official informed press that banks need better defenses. Besides new security measures, the Philippine central bank is weighing also a new regulatory steps related to bitcoin businesses to avoid money laundering.
These latest hacks against financial institutions brought more worries to the old-fashioned banking industry due to cyber threats.Naturally, Philippine central bank is worried as well and security became its top priority, so he financial institution has organized a new cyber security surveillance division for monitoring and supervision of its branches’ security from exterior threats. The central bank deputy governor, Nestor Espenilla said in a conference:
“We created a new division that is focused on cyber security issues to strengthen our capacity to deal with these attacks.”
As well as the announcement of the new cyber security team, Espenilla added that policymakers are planning on tightening virtual currency regulations. This will include Bitcoin exchanges, brokers, remittance companies, and money transmitters.
The regulating officers will keep trying to reduce money laundering activities. Espenilla says that Bitcoin has become very popular in the region with users doubling last year. The governor informed that from $2 million to $3 million USD a month is passing through the hands of these operators as the Philippines is a country where digital currency has gained a foothold. Even in 2014, a lawmaker from Manila introduced a digital currency with Bitcoin characteristics called the “E-Peso” to act as an online legal tender.
This year, Philrem Service Corporation, a remittance company based out of Manila, had its license revoked by the Philippine central bank for being involved with the Bangladesh central bank breach.
Policymakers state that the company’s service was used in the heist where hackers transferred $81 million using the platform. The company, founded in 1998, received a complaint from the Anti-Money Laundering Council that the facilitators helped move the money around between bank accounts, casinos, and Manila junket operators. Philrem Service Corporation denied it but lost its license to operate money transmission.
We still do not know when the new regulatory policies concerning Bitcoin operators will come into effect. However, according to central bank statements, the regulations should be strict, which could have a negative impact on Bitcoin businesses and related remittance startups.
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