By Freddie Lazaro
STA. ANA, Cagayan – The income for the first nine months of the Cagayan Economic Zone Authority (CEZA) rose 212 percent, a record high, on the back of robust collections from offshore virtual currency exchange (OVCE) and blockchain firms and their local business processing outsourcing (BPO) subsidiaries.
Secretary Raul L. Lambino, CEZA administrator and chief executive officer, said that compared to last year’s three quarter income of P166,339,889, CEZA registered P518,296,127 for the same period, the bulk coming from 17 Fintech firms.
The OVCE principal licensees paid application and license fees amounting to P371,949,735 at the end of September this year, Lambino said.
“We expect to earn more in the coming months once these OVCEs start to trade cryptocurrencies or conduct primary placement of coins or exchange” he said.
Licensing fees from gaming operations slowed to P127,315,981 compared to P150,833,547 last year because of CEZA’s new thrust to limit online gaming operations.
On the other hand, seaport operations at Port Irene earned P5,786,957 compared to P1,068,116 in 2017.
Cryptocurrency exchange is not done in the country but offshore firms have flocked to CEZA, seeing it “as a safe haven” even if existing laws do not allow the use of digital assets for payment, Lambino said.
Since the economic zone launched its “Crypto Valley in Asia” project in May, Lambino has incentivized the trading firms using a multi-tier system that also increased the government’s shares as the volume of transactions grew bigger.
Under the new policy, CEZA’s maximum monthly recurring fee is pegged at $10,000 for every average monthly volume of ten million US dollars.
Already listed as CEZA OVCE principal licensees are Golden Millennial Quickpay, Liannet Technology, Ultra Precise, Rare Earth, Tanzer Holdings, Formosa Financial, Asia Premier, Dragon Empire, Galaxy Plus, Orient Express, White Ranch, Sino-Phil, HK Yuen, Tiger Wheel, Digifin Technologies, CR8TIV and IPE Global.
Lambino said the primary revenue sources of OVCEs are transactional fees earned from the volume traded on the cryptocurrency exchange where the average global total is pegged at 0.1 percent of each transaction.