July 22, 2018, 11:34 pm
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CEZA to rake in P3.6B from crypto currency back offices

The Cagayan Economic Zone Authority (CEZA) sees P3.6 billion in revenues annually from the back office operations of crypto currency exchanges in the planned financial technology (Fintech) Hub in the zone. 

Secretary Raul Lambino, administrator and chief executive officer, yesterday led the awarding ceremony to Hong Kong-based Global Millennial Quick Pay Ltd. (GMQ), the first financial technology solution and offshore virtual currency (FTSOVC) operator to be granted a principal license (under provisional status) by  the Authority.

Raymundo Roquero, CEZA senior deputy administrator, said five more  FTSOVC operators are set to be approved in the near term, one of which is  Lianette Corp. also of Hong Kong.

Roquero said CEZA eyes to issue a total of four principal licensees each to be allowed to sub-license to 100 more operators. 

Each principal license costs $360,000 on top of a $1-million investment requirement. A sub-license costs about $86,000. 

Roquero said CEZA would also earn in terms of licenses,  application  fees,  business association fees as well as a share of .1 percent in the transaction value which assures a recurring income for the Authority.

Catherine Joy Alameda, CEZA corporate board secretary, said GMQ would locate its servers and data centers that host the virtual currency trading happening offshore.

Alameda said GMQ would initially locate its mainframe in LR Data’s building in Cagayan but would move to the Fintech Hub when it finishes in two years.

LR Data is a Filipino-owned company which hosts servers for internet gaming.

Alameda explained no Filipinos nor internet service providers emanating from the Philippines would be allowed to trade.

“A virtual currency exchange is not like a stock or currency exchange. (These exchanges)  look for jurisdictions that are secure in contracts and in infrastructure. CEZA allows them to (locate)  their back offices, servers and data centers (in a secure environment),” said Alameda.

Once those virtual currencies are converted, the transactions should be registered with the Bangko Sentral ng Pilipinas.

But right now, the Securities and Exchange Commission  has no rules on the operations of these exchanges.

Alameda said similar jurisdictions are offered in Malta, Singapore, Hong Kong, Gibraltar, Dubai and New York,

“That is the marketability of CEZA (as host)…   secure  contracts and infrastructure…  because it is a government agency,” she added.

Lambino said GMQ is pioneer in CEZA’s venture to establish a financial technology and offshore virtual currency exchange business, which will eventually form the nucleus of the CEZA Fintech Hub. 

He noted the future of fintech is enormous saying the value of one “coin” in the platform Etherium unpredictably rose from $8 on Jan. 1, 2017 to $843 exactly one year later.

 “Our charter has put us in this perfect position to create this Fintech Hub that shall produce financial products relating to blockchain, cryptocurrency exchanges, initial coin offerings, payment solutions, cloud computing, big data, Artificial Intelligence, robo-advice and other financial technology solutions,” Lambino said. 
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