While a majority of Filipinos had been aware of cryptocurrencies, actual holdings remained low due to perceived risks from these digital assets.
An Organization for Economic Cooperation and Development (OECD) report published this month said the level of awareness on cryptocurrencies in the Philippines was 74 percent among respondents in a survey conducted last February and March.
According to the report, “Cryptoassets in Asia: Consumer attitudes, behaviors and experiences,” the level of awareness ranged from “not very well” (27 percent), “some extent” (20 percent) to “very well” (17 percent).
The survey was also conducted in Malaysia and Vietnam.
A lower 38 percent of respondents were aware of so-called initial coin offerings, or ICOs, a form of crowdfunding using cryptocurrencies.
Among Filipino respondents, only 32 percent said they owned cryptoassets while just 14 percent were ICO investors.
In the Philippines, majority or 51 percent of cryptocurrency holders were between the ages of 45 and 54, likely male, employed, hold master’s or doctorate degrees, according to the survey.
Intent to invest in cryptocurrencies was high among Filipinos (53 percent) but only 25 percent expressed interest in ICOs.
The top reasons for Filipinos having cryptocurrencies included curiosity (40 percent), legal tender for online purchases (39 percent) and to make money quickly (36 percent).
ICOs appealed to Filipinos who wanted to earn money quickly (38 percent), those looking for long term investments or retirement funds (31 percent) and to know more about ICOs (31 percent).
At least 43 percent of those with cryptocurrencies bought them online, 37 percent mined them and 27 percent received them as payment for goods or services.
To buy cryptocurrencies, 47 percent of Filipino respondents shelled out money from their monthly budget, while 43 percent used funds from their savings.
Before purchasing cryptocurrencies or investing in ICOs, 55 percent sought advice from relatives or friends while 72 percent sought the opinion of experts in blockchain and related technology.
At least 62 percent of Filipino respondents said they could afford to lose money if their investments in cryptocurrencies turned bad.
The OECD report said, respondents in the Philippines “were slightly more exposed to risk.”
At least 15 percent of respondents had put half of their crypto eggs in the basket.
Filipino investors in ICOs were exposed to risk with 21 percent having half of their investments in ICOs, the report added.
The Bangko Sentral ng Pilipinas and Securities and Exchange Commission were the main regulatory agencies for cryptocurrencies in the Philippines, said OECD.
But cryptocurrencies are not recognized or classified as legal tender but entities engaged in cryptocurrency trade were required to obtain a certificate of registration as remittance and transfer companies.
These types of companies are required to have sufficient safeguards against money laundering, terror financing, tech risks and consumer protection mechanisms.
In 2018, the amount of trade in ICO was estimated at $9.6 million in the Philippines.
But these were largely unlicensed as the SEC filed cease and desist orders against four ICO traders.
This was followed by an SEC notice for consultation on proposed regulatory framework for ICO.
Edited by TSB