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Policy & Regulation

The incoming governor of Philippines’ Central Bank slams crypto

21 Jun 2022 : 09:13
2 min read
  • The incoming governor of BSP called crypto a product of "greater fool theory"
  • He believes that crypto is just a way to launder money
  • BSP is already testing a Central Bank Digital Currency

The incoming governor of Bangko Sentral ng Pilipinas (BSP), Felipe M. Medalla, shared his views on cryptocurrencies and stated that he does not believe in regulating the crypto market. He added that crypto is based on “the greater fool theory.”

Crypto: A product of greater fool theory?

According to the greater fool theory, “it doesn’t matter at what price you buy an asset, so long as there is some ‘greater fool’ out there who will buy it for more.” It seems that the incoming governor of the BSP is not very much supportive of the concept of blockchain-based crypto assets being used for payments.

Medalla was present during a virtual roundtable discussion with BusinessWorld on June 14 where he said that “every Bitcoin buyer that I know does not use (cryptocurrency) for anything… The only reason you’re using this is you think somebody else will buy it from you at a higher price. That’s a very scary investment.”

“The value of crypto is what some other person decides someone else will pay for it, so not adding to society like other investments,” Medalla said.

New tool to hide money?

While the BSP is also engaged in testing a Central Bank Digital Currency (CBDC), as per a previous report from Cryptonary, the incoming governor added that crypto is a new tool for money launderers.

“This is a new tool that adds to the ability to do that [money laundering]. There are plenty of people who want to hide their money from the government,” Medalla added.

He shared that in his view “the moment you cross from the virtual world to the fiat and physical world, you have to have KYC (Know Your Customer) policies… and apply the same anti-money laundering policy.”


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