PROVIDING home to foreign fintech firms engaged in blockchain and cryptocurrency business has given the Cagayan Economic Zone Authority (CEZA) a quick return.
This is in the form of exactly Php518,296,127 of revenue in the first three quarters of 2018, a 212 percent increase compared to the same period in 2017.
Secretary Raul L. Lambino, administrator and CEO of CEZA, reported this in announcement he made through statements disseminated to the news media.
He said the record-high revenue was a result of the robust collections from the offshore virtual currency exchange (OVCE) and blockchain firms and their local business processing outsourcing (BPO) subsidiaries in the Philippines.
It can be recalled that over the last few months of the year CEZA has issued provisional Financial Technology Solutions and Offshore Virtual Currency (FTSOVC) licenses to the initial 17 fintech firms that qualified under the agency’s “probity and integrity” check.
The check was conducted to determine the authenticity of the offshore firms and prevent those which are going to engage in scams.
Lambino said the OVCE principal licensees paid application and license fees totaling P371,949,735.32 by end of September last month.
He likewise looks forward to and voiced confident a rosy future for the fintech firms that have registered under CEZA to operate at the Cagayan Special Economic Zone and Freeport (CSEZFP).
He expect more money to be made from the offshore firms, which are expected to establish offices at the CSEZFP.
“We expect to earn more in the coming months once these OVCEs start to trade cryptocurrencies or conduct primary placement of coins or exchange,” Lambino pointed out.
Secretary Raul L. Lambino, CEZA administrator and CEO, speaks about offshore blockchain and cryptocurrency coming to the zone in Cagayan Valley province. Behind him is CEZA Deputy Administrator Raymundo T. Roquero during a recent cryptocurrency summit. (EKU)
‘Crypto Valley in Asia’
Located in Sta. Ana municipality in Cagayan province, CEZA’s other income sources for the third quarter also registered robust increases more than last year’s revenue of the same period.
Not everything was what the authority wished for or wanted because of decreased online gamin.
Interactive gaming operations slowed down at P127,315 , 981.27 in licensing fees compared to P150, 833, 547.80 last year because of CEZA’s new thrust to limit the online gaming operations inside the zone.
As far as increased revenue is concerned, CEZA’s seaport operations saw also an increase with Port Irene earning P5,786,957 compared to P1,068,116 in 2017, and garbage fees rose to P296,400 from PP32,550, servicing some 95 business locators.
“Cryptocurrency exchange is not done in the country but offshore firms have flocked to CEZA for their operation, seeing the economic zone “as a safe haven” even if existing laws do not allow the use of digital assets for payment,” Lambino said.
He added that since the economic zone launched its “Crypto Valley in Asia” project in May, they have incentivized the trading firms using a multi-tier system that also increased the government’s shares as the volume of transactions grew bigger.
Under the new policy, CEZA’s maximum monthly recurring fee is pegged at $10,000 for every average monthly volume of $10 million United States dollars.
But the shares jump higher from $10,000,001 to $100,000,000 bracket at $10,001 to $50,000 as CEZA’s fees, capping at $ 800,000 for the $89,000,000 to $999,999,999, 999 daily deals.
Already listed as CEZA OVCE Principal Licensees are Golden Millennial Quickpay, Liannet Technology, Ultra Precise, Rare Earth, Tanzer Holdings, Formosa Financial, Asia Premier, Dragon Empire, Galaxy Plus, Orient Express, White Ranch, Sino-Phil, HK Yuen, Tiger Wheel, Digifin Technologies, CR8TIV and IPE Global.
Lambino said the primary revenue sources of OVCEs are transactional fees earned from the volume traded on the cryptocurrency exchange where the average global total is pegged at 0.1% of each transaction.
Meanwhile, from CEZA here is the list of the fintech firms already issued with FTSOVC license:
- Golden Millenial Quickpay Inc. Ltd.
- Ultra Precise Investment Ltd.
- Liannet Technology Ltd.
- Rare Earth Asia Technologies Corp.
- Formosa Financial Holdings Ltd.
- Tanzer Holdings Ltd.
- Asia Premiere International Ltd.
- Orient Express Global Ltd.
- White Ranch Limited Ltd.
- Dragon Empire Developments Ltd.
- Galaxy Plus Developments Ltd.
- Tiger Wheel Ltd.
- IPE Global Pte. Ltd.
- Cr8tiv Solutions Management Ltd.
- Sino-Phil Economic Zone Agency Development and Management Corp.
- Digifin Technologies Pte. Ltd.
- Hong Kong Yuen Shing Hong Ltd.
- Cezex Trading Pte. Ltd.
- Unicorn Venture Investment Limited
Around 80 fintech companies from abroad applied for a FTSOVC from CEZA. (EKU)