In this Meet the Trader interview, meet Moneybees Chairman and CEO, Jay Ricky B. Villarante, as he introduces himself and his licensed Philippines-based crypto exchange, shares his perspectives on Asia’s cryptocurrency adoption, and gives us his perspectives on the future of crypto in Asia and globally.
Moneybees (formally Moneybees Forex Corporation) is the first over-the-counter (OTC) cryptocurrency firm in the Philippines, providing an easier, more familiar and more convenient way for Filipinos to directly convert between cryptocurrency and fiat. Moneybees has one of Philippines’ few Virtual Asset Service Provider (VASP) licenses issued by the Bangko Sentral ng Pilipinas (BSP), which allows companies to engage in virtual asset transactions, as well as complying with the Anti-Money Laundering Council.
Jay, tell us a bit about yourself, personally. How do you enjoy spending your free time?
I enjoy spending my free time at home with my family, tending to our garden, walking our dogs, watching world news and history-related stories and topics about civilizations, playing computer games and doing regular yoga meditation.
How did you first encounter Bitcoin and cryptocurrencies?
I have been passionate about currency since grade school, starting with collecting many different kinds of coins. This passion of collecting coins led me to Bitcoin back at the USD 20 price point. I started trading Bitcoin in 2012, when it was still largely unknown to the majority of Filipinos. As I got to know more, my interest only grew deeper, which led me to starting my own blockchain & cryptocurrency business.
How has your perspective on digital assets changed since that time, back in 2012?
The perspective on digital assets in the Philippines has evolved significantly since 2012:
Firstly, in terms of awareness and understanding: In 2012, digital assets, particularly cryptocurrencies like Bitcoin, were relatively unknown and misunderstood in the Philippines. Many people were unaware of their existence or potential applications. However, over the years, there has been a significant increase in awareness and understanding of digital assets, driven by media coverage, educational initiatives, and the growing global popularity of cryptocurrencies.
Next, in the regulatory environment: In 2012, there was minimal regulatory oversight of digital assets in the Philippines, with government agencies largely uninvolved in regulating or supervising cryptocurrency activities. However, as the use of digital assets grew, regulators began to take a more active interest in the sector. In 2017, the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, issued Circular No. 944, which established guidelines for virtual currency exchanges, effectively recognizing cryptocurrencies as a legitimate form of financial instrument. Subsequent regulations and guidelines have further clarified the regulatory framework surrounding digital assets in the Philippines.
Third, in terms of adoption and acceptance: In 2012, the adoption and acceptance of digital assets in the Philippines were minimal, with only a small community of early adopters and enthusiasts engaging in cryptocurrency-related activities. However, as awareness increased and regulatory clarity improved, the adoption of digital assets has grown significantly. Cryptocurrency exchanges and trading platforms have emerged, making it easier for Filipinos to buy, sell, and trade digital assets. Moreover, businesses have begun accepting cryptocurrencies as payment for goods and services, further pushing their use into the mainstream.
Finally, in investment and innovation: In 2012, digital assets were primarily viewed as speculative investments or technological curiosities, with limited investment opportunities and infrastructure available in the Philippines. However, as the cryptocurrency market matured, investment opportunities expanded, with a growing number of Filipinos investing in digital assets as part of their investment portfolios. Additionally, blockchain technology, the underlying technology behind many digital assets, has sparked innovation across various sectors, including finance, supply chain management, and healthcare, creating new opportunities for businesses and entrepreneurs in the Philippines.
Overall, the perspective on digital assets in the Philippines has shifted from skepticism and unfamiliarity in 2012 to increased awareness, acceptance, and adoption in recent years, driven by regulatory developments, technological advancements, and changing consumer attitudes.
What benefits draw you to peer-to-peer vs other types of crypto marketplaces?
Regulatory-compliant merchants like us may be drawn to peer-to-peer (P2P) crypto marketplaces over other types of crypto exchanges for several reasons:
First, we’re pleased with the bespoke, multi-tier compliance: While most of the well-known marketplaces implement robust Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to ensure compliance with regulatory requirements, P2P platforms allow traders to conduct their own set of KYC procedures and enforce their own legal and regulatory standards on customers they wish to trade with to mitigate risks associated with potential legal ramifications or regulatory scrutiny. This lets us set out our own requirements and terms, which allow us to comply with local regulations while offering the best possible service to our customers.
Next, we appreciate the enhanced security: P2P platforms typically offer enhanced security features such as escrow services and dispute resolution mechanisms, which provide added protection for both buyers and sellers, in an otherwise possibly risky market exchange. Regulatory-compliant traders value these security measures to minimize the risk of fraud and ensure the integrity of transactions.
Thirdly, transparency and trust are very important to us: P2P platforms facilitate direct interaction between buyers and sellers, fostering transparency and trust in the trading process. Regulatory-compliant traders appreciate the transparency of P2P transactions, as they can directly verify the counterparty’s identity and reputation, reducing the likelihood of fraudulent activities.
Fourth, flexibility and control are key for us: P2P platforms offer traders greater flexibility and control over their transactions, allowing them to negotiate terms and conditions directly with counterparties. Regulatory-compliant traders may prefer the autonomy afforded by P2P trading, enabling them to customize trades according to their preferences and risk tolerance.
Finally, access to diverse payment options: P2P platforms often support a wider range of payment methods, including bank transfers, and online payment systems.. Regulatory-compliant traders benefit from the flexibility to choose payment methods that comply with regulatory requirements and align with their risk management strategies.
Overall, regulatory-compliant traders are attracted to P2P crypto marketplaces for their adherence to regulatory standards, enhanced security features, transparency, flexibility, and diverse payment options, which collectively contribute to a safer and more reliable trading environment.
How would you describe the role cryptocurrency plays in the country in which you live, and/or in the market you serve. How do you see that changing with time?
Cryptocurrency plays several roles in the Philippines, and its significance is likely to evolve over time:
Remittances: The Philippines is one of the top recipients of remittances globally, and cryptocurrency provides a more cost-effective and efficient alternative for cross-border payments compared to traditional remittance channels. Cryptocurrency remittances offer faster transaction times and lower fees, making them attractive to overseas Filipino workers (OFWs) sending money back home.
Financial Inclusion: Cryptocurrency has the potential to expand financial inclusion by providing access to financial services for the unbanked and underbanked population. With a smartphone and internet connection, individuals can participate in the cryptocurrency economy, enabling them to send and receive payments, access savings and credit facilities, and engage in peer-to-peer and over-the-counter transactions without the need for traditional banking services.
Investment Opportunity: Cryptocurrency serves as an investment asset class for Filipinos seeking diversification and potential returns. Many Filipinos view cryptocurrency as an alternative investment option, particularly during times of economic uncertainty or when traditional investment avenues are limited.
Blockchain Technical Infrastructure: Beyond cryptocurrency, blockchain technology holds promise for various applications in the Philippines, including supply chain management, voting systems, land titling, and healthcare. As awareness and understanding of blockchain technology increase, its adoption across different sectors of the Philippine economy is expected to grow.
However, the role of cryptocurrency in the Philippines is subject to various factors, including regulatory developments, market dynamics, technological advancements, and public perception. With evolving regulatory frameworks and increasing mainstream acceptance, cryptocurrency adoption in the Philippines may continue to expand, driving innovation and reshaping the country’s financial landscape.
Nevertheless, challenges such as regulatory uncertainty, cybersecurity risks, and volatility may also influence the trajectory of cryptocurrency adoption in the Philippines over time.
What are the paint points in your local traditional financial system? How do Paxful and the use of cryptocurrency mitigate those?
In the Philippine traditional financial system, several pain points persist, hindering the efficiency and inclusivity of the system:
Limited Access: A significant portion of the population, especially in rural areas, lacks access to formal banking services, including savings accounts, loans, and other financial products.
High Transaction Costs: Traditional banking services often come with high transaction fees, making them inaccessible to low-income individuals and small businesses.
Lengthy Processes: Manual and paper-based processes contribute to lengthy transaction times and bureaucratic hurdles, leading to inefficiencies and delays in accessing financial services.
Lack of Financial Literacy: Many Filipinos have limited knowledge about financial products and services, leading to underutilization or misuse of banking facilities and inadequate financial planning.
Security Concerns: Instances of fraud, identity theft, and cybersecurity breaches pose significant risks to individuals’ financial security and erode trust in the traditional financial system.
Exclusion of Informal Economy: A sizable portion of the Philippine economy operates in the informal sector, outside the purview of traditional financial institutions, leading to financial exclusion and limited access to credit and other financial services.
What advice do you have for other traders wanting to grow their own businesses?
Based on my experience, traders who want to establish and grow their business should observe and implement the following important practices:
Understand Regulatory Requirements: Familiarize yourself with the regulatory landscape governing cryptocurrency trading in your jurisdiction. Stay updated on laws, regulations, and guidelines issued by relevant regulatory authorities, such as financial regulators and tax authorities.
Implement KYC and AML Procedures: Establish robust Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to verify the identities of your customers and detect suspicious activities. Conduct thorough due diligence on clients and transactions to ensure compliance with regulatory requirements.
Partner with Reputable Service Providers: Collaborate with reputable financial institutions, payment processors, and compliance service providers that adhere to regulatory standards and have experience in the cryptocurrency industry. Choose partners with strong compliance frameworks and a commitment to combating financial crime.
Educate Employees: Provide comprehensive training to your employees on compliance policies, procedures, and best practices for detecting and preventing money laundering and illicit activities. Encourage a culture of compliance and integrity within your organization.
Monitor Transactions: Implement robust transaction monitoring systems to detect and report suspicious activities, including unusual transaction patterns, large cash transactions, and transactions involving high-risk jurisdictions or individuals.
Maintain Accurate Records: Keep detailed records of your cryptocurrency transactions, including transactional data, customer information, and compliance documentation. Maintain accurate records to facilitate audits and regulatory inspections and demonstrate compliance with regulatory requirements.
Engage Legal Counsel: Seek legal advice from experienced lawyers specializing in cryptocurrency regulation and compliance. Consult legal counsel to ensure that your business practices comply with applicable laws and regulations and mitigate legal risks.
Foster Transparency and Cooperation: Maintain open communication with several stakeholders including regulatory authorities and law enforcement agencies. Comply diligently with required reportorial requirements. Cooperate with regulatory audit examinations, inquiries and investigations, and promptly report any suspicious activities or compliance breaches to the relevant authorities.
By adhering to these best practices and adopting a proactive approach to compliance, Bitcoin and cryptocurrency traders can grow their businesses in a legitimate and compliant manner while mitigating the risks of involvement in money laundering and illegal activities.
