The Philippine government is welcoming nearly a dozen cryptocurrency companies to operate in a special tax-friendly economic zone situated in close proximity to a number of neighboring countries.
According to a Reuters report, the Philippines will legalize the entry of top 10 blockchain and cryptocurrency companies to operate in the Cagayan Economic Zone Authority (CEZA), a government-controlled economic zone that is within an hour’s flight away from the likes of Hong Kong, China, and Taiwan.
The government aims to woo cryptocurrency companies to operate out of the economic zone with tax benefits to help generate employment opportunities locally, Cagayan Economic Zone Authority chief Raul Lambino told Reuters.
Notably, the official confirmed that the government will also license – in effect legalize – the cryptocurrency firms in the special zone.
The companies will also be allowed to operate exchanges, offer initial coin offerings (ICOs) and engage in cryptocurrency mining within the zone, he added, stating:
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 exchange.
There is a caveat, however. Any exchange of fiat money into cryptocurrencies or vice-versa should be conducted beyond Philippines’ borders to avoid infringing the country’s laws.
To aid in bringing jobs to those companies, the economic zone’s regulator is also considering establishing a new financial technology university in the economic zone with a specific focus on blockchain technology, Lambino added.
The embracive stance follows newly introduced rules by the CEZA in February which allowed cryptocurrency companies to legally establish offices and facilities in the special zone. To gain a license, companies must invest at least $ 1 million in the zone over two years and pay up to $100,000 in licensing fees.
Meanwhile, in the mainland, the Philippines’ central bank was previously known to be reviewing the applications of a dozen operators vying to register and launch cryptocurrency exchanges in the country as recently as December. It remains to be seen if these operators have since switched tact to register in the economic zone instead.
The Philippines became one of the earliest nations in the world to publish regulations for cryptocurrency exchanges in early 2017. The deputy director of the central bank, appearing in a televised interview in October 2017, lauded the ‘pioneering regulation’ and said bitcoin, as a monetary instrument, is “fast, near real-time and convenient”.