Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said they are studying how they could regulate or at the very least have a stricter monitoring of the various online gaming platforms such as the Pokemon-style Axie Infinity.
Diokno, in a virtual forum on Monday, Oct. 4, admitted there are benefits from innovation such as play-to-earn that will convert gaming points to earnings which use tokens as assets as far as financial inclusion is concerned.
However, he cautions individuals that are taking part of this online community of potential big losses down the line after accumulating revenues by gameplaying. “Part of our mandate (is) to protect consumers from losses as a result of this so we are trying to weigh the benefits and the costs,” said Diokno.
The task force created by the BSP to study innovation with a focus on cryptocurrency and the future issuance of a central bank digital currency (CBDC) is also looking into play-to-earn ecosystems. They hope to come up with a cost-benefit analysis and decide how the BSP could regulate these online payment transactions.
“(The) new technology or items such as cryptocurrency or CBDC – these are now becoming to be popular among central bankers so we exchange notes and we want to make sure that we do this very deliberately, safely, and so we have created a task force within BSP to study all this and we’ll make the necessary arrangements as needed. But, right now we’re not into digital currency yet but we’ll probably be there in a few years,” said Diokno.
The BSP has said previously that in the case of Axie Infinity’s Smooth Love Potion which are cryptocurrency assets used as payment, they are studying how gamers are exchanging their tokens and the extent of the merchant network.
Based on initial findings, the BSP said it does not consider Vietnam-based Sky Mavis which owns Axie Infinity as a virtual asset service provider (VASP) but it is looking into its possible classification as an operator of payment system (OPS).
The BSP’s regulatory framework for VASPs allow end-users to exchange fiat currency to crypto assets to acquire non-fungible tokens for game applications and to convert the same back into fiat currency. An OPS, in the meantime, could be cash-in service providers, bills payment service providers, and entities such as payment gateways, platform providers, payment facilitators and merchant acquirers that enable sellers of goods and services to accept payments, in cash or digital form.
As for BSP’s foray into CBDCs, it still studying the legal aspect and regulation of its issuance including implications on the country’s fight against “dirty money” or money laundering. It is also assessing a CBDC’s potential impact on its central bank functions such as monetary policy transmission, and in ensuring financial stability as well as an efficient and safe payment and settlement system.
Diokno said earlier that the Philippines is not likely to have a CBDC within his term which ends in mid-2023.