The Central Bank of the Philippines is warning residents and citizens of the country against the use of crypto.
The Philippines Claims Crypto Is Used for Illicit Purposes
In a recent statement, bank governor Benjamin Diokno explained that cryptocurrencies are widely used to fund terrorist activities and other organizations with malicious intent. In addition, he also stated that cryptocurrencies bear no store of value and are a poor “substitute for fiat money.” He lastly explained that digital assets give people an opportunity to “sideswipe” the banking industry.
For these reasons, game theory dictates possible disfunction when there is market breakdown, when everyone may distrust one another. There cannot be a total disregard for a central bank or a third party that provides lenders of last resort facility.
The big question here is an obvious one: why are people, predominantly financial regulators, still using these age-old, no longer relevant arguments to go against crypto?
Diokno and the Philippines claim that crypto allows people to “sideswipe” the banking system. However, if he knew anything about crypto and about why it was created, he would acknowledge that crypto doesn’t call for the destruction of banks. It simply provides users a chance to create their own financial independence.
As it stands, many banks boast terms and conditions that must be met by all their customers if they seek easy access to funds, loans, lines of credit and similar tools designed to assist them in their everyday spending and survival needs. Anyone who can’t abide by these terms are left out in the dark and are completely controlled by whatever financial institution they’re working with.
Crypto, on the other hand, does away with this method of thinking and attempts to give people their freedom back. Granted they cannot afford to play by a bank’s rules – maybe they don’t have the high-paying job of a powerful executive or their credit isn’t as strong – they are able to use digital assets to purchase whatever goods and services they need each to day to survive and provide for their families. The situation is a simple one, but financial authorities always seem to want to target crypto in the wrong ways.
Volatility Is Still a Major Problem
Where digital assets tend to fail is in their vulnerability to outside market influence and volatility. At press time, for example, bitcoin, after a long period of recovery, is trading for $7,700. While this is still miles better than where it stood at the beginning of the year, this is a fall from the near $9,000 mark it stood at roughly two weeks ago.
These price swings have caused several merchants to deny cryptocurrencies as methods of payments, though this may be changing with the introduction of ventures like Flexa.
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