Philippines Economic Zone Welcomes Cryptocurrency Startups
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The Cagayan Special Economic Zone has signed up the first 15 offshore fintech companies to locate in its new fintech and blockchain hub, among which several cryptocurrency and blockchain startups including CoinBundle, Madison Blockchain Strategy Investment Company, Asia Pacific Blockchain Association, and ANX International.
CEO and co-founder of CoinBundle, Saad Rizvi (left) with Sec. Raul Lambino
During the event “A New Venture in the Valley Unfolds: CEZA Fintech Summit 2018” at Bonifacio Global City on May 21, Raul Lambino, administrator and chief of the Cagayan Economic Zone Authority (CEZA), the state agency which manages the special economic zone, highlighted CEZA’s ambition to turn Cagayan Valley into a “Fintech City” or the “Silicon Valley of Asia” with a particular focus on cryptocurrencies and blockchain.
“Working with virtual currency companies allows the Philippines to gain momentum in providing an environment that encourages financial innovation and inclusion, while ensuring that the best interests of the country, the financial system, consumers, and investors are adequately protected,” Lambino said.
“This new development aims to drive the economy forward by creating employment opportunities and boosting job growth. The Philippines will be ready to provide cryptocurrency companies operating here with the manpower they need for their businesses.”
Among the early offshore companies accepted into the economic zone, several have inked memoranda of understanding (MoU) with CEZA. For instance, CEZA signed an MoU with Korean conglomerate Hanwa Group, which will see the group support the fintech and blockchain programs of CEZA.
Other deals were signed with Hong Kong-based firms Xin Peng Group, Changwei International, and trading firm ST Union Capital Holdings. All of these are interested to undertake the creation of an international cryptocurrency exchange platform and other related businesses.
Based on the agreement, each company will get full tax perks in exchange for yearly investments and contributions to developing the fintech industry of the country.
Reports suggest that the deals should translate to at least PHP 1.7 billion (US$32.3 million) in investments over the next two years, including application and license fees to be paid by the cryptocurrency companies that would operate exchanges, engage in cryptocurrency mining and blockchain production, and initial coin offerings (ICOs), among other.
Within the next two years, Lambino said that CEZA would strive to build up infrastructure to link Cagayan Valley’s economic zone to the rest of the world. He added that an initial 8-hectare property within the 55,000-hectare economic zone will be made available to potential fintech locators. Lambino said they were also looking at putting up a blockchain and fintech university to provide workers for the companies.
In February, CEZA created rules allowing cryptocurrency companies to set up offices and facilities in the economic zone.