Now pending in Congress is House Bill 7864 or the Blockchain Technology Development Act, which seeks to legally recognize and regulate the so called ‘blockchain technology’ and make the Philippines financial technology (fintech) capital of Asia, now pends in Congress.
Authored and recently filed by Albay Rep. Joey Sarte Salceda, House Ways and Means Committee chair, Blockchain, or distributed ledger technology that enables the existence of cryptocurrency among other things, is a method of passing information from one terminal to another in a fully automated and secure manner. One party to a transaction initiates the process by creating a block.
Salceda said “blockchain is actually more than just cryptocurrency. At the heart of blockchain is a technology that makes the storage and updating of records more secure. It also lowers transaction costs and is very difficult if not impossible to defraud.”
With blockchain, the lawmaker said he expects transaction costs for money transfers and other financial services to be cheaper for Filipinos. “Blockchain is also very secure and the records are highly portable. That makes it a perfect tool for programs such as the National ID system, better records management in PhilHealth and better distribution of social benefits,” he added.
Salceda, however, said the block is verified by thousands, or even millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, “creating not just a unique record, but a unique record with a unique history.”
The way Blockchain distributes transaction histories across the net is a reason why it is used for cryptocurrencies like Bitcoin. Cryptocurrency is a digital medium of exchange using encryption techniques to control the creation of monetary units and to verify the transfer of funds.
Salceda said “Blockchain can be applied across so many areas in both the public and private sectors. I want us to grab the opportunity to be a hub for this development.”
The measure identifies the permitted and restricted uses of blockchain technology while establishing the Bangko Sentral ng Pilipinas (BSP) as the policy-making and regulatory agency for the use of blockchain in the financial sector. It also encourages the use of blockchain technology in the broader economy and in human development programs, he explained.
The measure also releases blockchain use from overregulation by local governments; and explores its use in the National ID system.
Earlier, Salceda said he hopes to lead the charge in Congress for policies that will make the country a hub for financial technology firms fleeing Hong Kong due to stringent regulations, and Singapore and Shanghai which are now both oversaturated.
“We have a large untapped consumers market of financial products. And we have an untapped labor force that could be trained to become skilled workers in this field. The Philippines is definitely in the game,” Salceda stressed.
Salceda also targets a $20-billion annual foreign direct investment inflow into the country under under several bills he had earlier filed, including the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, to enable the country to realize its rapid national development goal.
The lawmaker said the efforts to make the country a fintech capital are part of his goal to meet this national target.