SEC tests waters with crypto, Binance-linked services
The Securities and Exchange Commission (SEC) is keeping the door open to testing Binance-linked services in the Philippines, but stressed that participation in its regulatory sandbox does not guarantee eventual approval.
SEC Chair Francis Lim said the regulator was willing to test emerging technologies rather than reject them simply because they were new or unfamiliar.
“We should not close our minds to innovation,” Lim said. “We do not approve innovation only because it is new; neither do we reject it because it is unfamiliar.”
His comments came after Philippine Stock Exchange (PSE) president Ramon Monzon had questioned the SEC’s decision to admit Blockshoals Technologies Inc., a local partner of global cryptocurrency exchange Binance, into its regulatory sandbox.
Lim stressed admission into the sandbox was only part of an evaluation process and that the initiative “may or may not happen.”
“But we have to test,” he said. “We look at the data. We look at the appropriate regulation. In fact, it is a complete set of due diligence.”
SEC Commissioner Rogelio Quevedo likewise clarified that sandbox participation neither clears a company of previous violations nor puts it on a fast track toward securing regulatory approval.
“Being in the sandbox does not cure the penalties that will be imposed on a company that has committed violations against the Securities Regulation Code,” Quevedo said.
He also said the SEC would ensure that testing would not expose the investing public to potential abuses.
“The sandbox is not an excuse to get on the road to approval by the SEC,” Quevedo said, noting that applicants would still have to undergo several processes before securing the regulator’s green light.
Lim said sandbox testing could also take time. Citing the SEC’s survey of other markets, he noted that even in Singapore, it could take about two years before a participant “graduates” from a regulatory sandbox.
Beyond cryptocurrency, Lim said the SEC was studying other innovations that could widen participation in the Philippine capital market.
Among these is the potential tokenization or unitization of shares, which could make high-priced stocks more accessible to a broader pool of investors.
“That can generate more market participants,” Lim said.
The SEC chief maintained that regulators should remain receptive to emerging technologies as financial markets evolve globally, while subjecting new products to appropriate scrutiny.
