INTRODUCTION

In the not-so-distant future, there’s a big chance that money will lose its power and
currency transactions will be done using Bitcoin.
Entrepreneur Luis Buenaventura explains, “Bitcoin exists without the need for
government or a central authority, so it’s truly the world’s first peer-to-peer digital money. Other
forms of digital money have existed before, but they were created by private organizations who
controlled their respective micro-economies, and these eventually collapsed. Bitcoin was
designed to resist being controlled by any large entity, and its value is decided purely by the
open market.”
Buenaventura says in a sense it’s just like regular money, which you earn “by working
for it, or by selling goods in exchange for it.” In the same way that you buy foreign currency from
banks and forex shops, “You can buy Bitcoin at services like BuyBitcoin.ph or at a Bitcoin ATM
in Makati,” says Bailon.
Unlike paper money though, you can earn Bitcoin through your computer, by “mining”.
Using special software, you solve complex math problems and are issued a certain number of
bitcoins in exchange. CNN Money says, “Currently, a winner is rewarded with 25 bitcoins
roughly every 10 minutes.” For security, there’s a public ledger called the “blockchain,” which is
used to verify transactions.
Bitcoin is not an infinite resource. According to bitcoin.org, “Bitcoin is unique in that only
21 million Bitcoins will ever be created. However, this will never be a limitation because
transactions can be denominated in smaller sub-units of a Bitcoin, such as bits – there are
1,000,000 bits in 1 Bitcoin. Bitcoins can be divided up to 8 decimal places (0.00000001) and
potentially even smaller units if that is ever required in the future as the average transaction size
decreases.” What does that mean in peso terms? Bailon explains, “You can own as little as Php
1.00 worth of Bitcoins, which is around 0.000093 BTC right now. In fact, you can own some
Bitcoin that isn’t even worth 1 centavo, because the lowest Bitcoin denomination is 0.00000001
BTC or 1 Satoshi.”
How do you use it? Most banks now have an app for your smartphone, for bills payment,
funds transfer and other transactions. Bitcoin is much the same. Bailon enthuses, “It’s very easy
to use! You just download an app, and load it up with Bitcoins. Sending it is as easy as sending
an email.” And just like banks, transactions incur fees. But Buenaventura says, “When you are
paid in Bitcoin, the transaction fees are less than Php 3, no matter the amount. The bad news is
that you often need to trade that Bitcoin for pesos if you want to spend it, [so] you incur some
costs. In practice you lose about 1%. That’s still not a bad deal compared to PayPal or bank
wire transfers.” Companies like Microsoft, Dell and Overstock.com already transact in Bitcoins.
Currency of the future? Bitcoin sounds like currency straight out a dystopian future.
Bailon says, “In the future, expect to have your land titles, personal identification and even
marriage certificates all using some form of Bitcoin technology.” Some have even suggested
that someday, Bitcoin could be used as a single universal currency. But Scott Si of Coins.ph
isn’t so sure. “We don’t see Bitcoin as a replacement to fiat currency or the existing financial
system. Rather, it serves to augment it.
The current banking system relies on physical and IT infrastructure that is just too
expensive to serve most people, who in contrast, have little or no savings. By providing a more
efficient way to transfer value and reduce the reliance on cash, Bitcoin can save costs for
government, banks, and end consumers. In effect, this will also increase the number of people
that can be banked.” “If you look at Coins.ph as an example of a [Blockchain] service, we serve
as a low-cost, low-commitment gateway for these people who urgently need basic financial
services and who could eventually become banking customers themselves. It only takes 30
seconds to create an account on your mobile phone, after which you could pay bills, top up your
phone, and send funds to anyone, anywhere. We’re essentially extending the reach of financial
institutions to a market they previously cannot serve.”
Controversy. Bitcoin has its fair share of detractors, controversy, and abuse. Says Si,
“The emergence of Bitcoin made possible the exchange of value between any two people on
the planet without any intermediaries. Those who cared the most about user anonymity were
unfortunately (and expectedly) the first ones to gravitate towards this use case. When you step
back and look at the bigger picture however, you’ll see that Bitcoin is no different from any other
breakthroughs in history, in the sense that social deviants were the first to discover the use
cases and regulations often had to catch up with the technology.”
One of the biggest roadblocks Bitcoin hit was the Silk Road debacle. It was designed by
surfer-scientist Ross Ulbricht to be “a new kind of online market, where people could buy all the
things that aren’t available on ordinary online markets”. Ulbricht used Tor software for the
website, so that users couldn’t be tracked. Then to facilitate payments without risk of leaving a
trail, he used Bitcoin.
Why all the secrecy? Because Silk Road was an online shop for drugs like LSD,
mescaline and ecstasy. The FBI got involved, and the site was shut down in October 2013.
Says Si, “After the Silk Road debacle, the industry has taken great strides to focus on more
common use cases and more strictly observe KYC (know-your-customer) and AML (anti-
money-laundering) regulations. Silk Road was a rite of passage of sorts, a turning point that led
to more mature and responsible use of the technology. It is only by serving customers
responsibly and operating in line with local laws and regulations that Blockchain can truly move
forward and reach its full potential.”
Bitcoin in the Philippines. Though Bitcoin is less than ten years old, it’s already here in
the Philippines. Says Bailon, “The first ever Philippine Bitcoin company started in December
2013, called BuyBitcoin.ph. This company offered buy and sell services and has since merged
with our company, Satoshi Citadel Industries.” Buenaventura says there are few local
businesses trading in Bitcoin. “It’s a niche technology right now and it doesn’t seem like it will be
significantly more mainstream in the near future. Bitcoin is great for moving monetary value from
one country to another but currently it’s difficult to use it as an everyday currency.” With the
speed at which technology is evolving, all that may change in the next ten, maybe even five
years. Whatever the case, Bitcoin is definitely technology worth watching.1

Bitcoin is a digital assetand a payment system invented by Satoshi Nakamoto, who

published the invention in 2008and released it as open-source software in 2009. The system
is peer-to-peer; users can transact directly without an intermediary. Transactions are verified by
network nodes and recorded in a public distributed ledgercalled the block chain.
The ledger uses bitcoin as its unit of account. The system works without a central repository or
single administrator, which has led the U.S. Treasury to categorize bitcoin as a
decentralized virtual currency. Bitcoin is often called the first cryptocurrency, although prior
systems existed. Bitcoin is more correctly described as the first decentralized digital currency. It
is the largest of its kind in terms of total market value.

1
Bitcoin: Riding the currency current by Regina Layug Rosero, adobo magazine, 03-12-2015,
adobomagazine.com/philippine-news/bitcoin-riding-currency-current
 Bitcoins are created as a reward for payment processing work in which users offer their
computing power to verify and record payments into a public ledger. This activity is
called mining and miners are rewarded with transaction fees and newly created bitcoins.
Besides being obtained by mining, bitcoins can be exchanged for other currencies, products,
and services. When sending bitcoins, users can pay an optional transaction fee to the miners;
reception is free.
As of February 2015, the number of merchants accepting bitcoin for products and
services has passed 100,000, and merchants have an incentive to accept it because fees are
lower than the 2–3% typically imposed by credit cardprocessors. Despite the fourfold increase in
the number of merchants accepting bitcoin in 2014, the cryptocurrency did not have much
momentum in retail transactions. The European Banking Authority and other sources have
warned that bitcoin users are not protected by refund rights or chargebacks.
The use of bitcoin by criminals has attracted the attention of financial regulators,
legislative bodies, law enforcement, and media. Criminal activities are primarily centered
around black markets and theft, though officials in countries such as the United States also
recognize that bitcoin can provide legitimate financial services.2
Digital currency or digital money is an Internet-based medium of exchange distinct
from physical (such as banknotes and coins) that exhibits properties similar to physical
currencies, but allows for instantaneous transactions and borderless transfer-of-ownership.
Both virtual currencies and cryptocurrencies are types of digital currencies, but the converse is
incorrect. Like traditional money these currencies may be used to buy physical goods and
services but could also be restricted to certain communities such as for example for use inside
an on-line game or social network. Digital currencies such as bitcoin are known as
"decentralized digital currencies," meaning that there is no central point of control over the
money supply.3

Some Things you Need to know about Bitcoin

Bitcoin lets you exchange money in a different way than with usual banks.

Securing your wallet

Like in real life, your wallet must be secured. Bitcoin makes it possible to transfer value
anywhere in a very easy way and it allows you to be in control of your money. Such great
features also come with great security concerns. At the same time, Bitcoin can provide very high
levels of security if used correctly.

Bitcoin price is volatile

The price of a bitcoin can unpredictably increase or decrease over a short period of time
due to its young economy, novel nature, and sometimes illiquid markets. Consequently, keeping
your savings with Bitcoin is not recommended at this point. Bitcoin should be seen like a high
risk asset, and you should never store money that you cannot afford to lose with Bitcoin. If you
receive payments with Bitcoin, many service providers can convert them to your local currency.

2
en.wikipedia.org/wiki/Bitcoin
3
en.wikipedia.org/wiki/Digital_currency
Bitcoin payments are irreversible

Any transaction issued with Bitcoin cannot be reversed, they can only be refunded by
the person receiving the funds. That means you should take care to do business with people
and organizations you know and trust, or who have an established reputation. For their part,
businesses need to keep control of the payment requests they are displaying to their customers.
Bitcoin can detect typos and usually won't let you send money to an invalid address by mistake.
Additional services might exist in the future to provide more choice and protection for the
consumer.

Bitcoin is not anonymous

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are
stored publicly and permanently on the network, which means anyone can see the balance and
transactions of any Bitcoin address. However, the identity of the user behind an address
remains unknown until information is revealed during a purchase or in other circumstances. This
is one reason why Bitcoin addresses should only be used once.

Unconfirmed transactions aren't secure

Transactions don't start out as irreversible. Instead, they get a confirmation score that
indicates how hard it is to reverse them. Each confirmation takes between a few seconds and
90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is
otherwise atypical, getting the first confirmation can take much longer.

Bitcoin is still experimental

Bitcoin is an experimental new currency that is in active development. Each

improvement makes Bitcoin more appealing but also reveals new challenges as Bitcoin
adoption grows. During these growing pains you might encounter increased fees, slower
confirmations, or even more severe issues. Be prepared for problems and consult a technical
expert before making any major investments, but keep in mind that nobody can predict Bitcoin's
future.

Government taxes and regulations

Bitcoin is not an official currency. That said, most jurisdictions still require you to pay
income, sales, payroll, and capital gains taxes on anything that has value, including bitcoins. It
is your responsibility to ensure that you adhere to tax and other legal or regulatory
mandates issued by your government and/or local municipalities.4

Filipino Bitcoin CEO wants to change how we use money

Sam Kaddoura puts up buybitcoin.ph allowing Filipinos to directly buy and sell the
controversial cryptocurrency. Experts often predict that the “cryptocurrency” known as Bitcoin
will become hugely popular in the Philippines. Still, Bitcoin remains largely unknown to the

4
bitcoin.org/en/you-need-to-know
average Filipino, which shows that its adoption will come down to the quality of the companies
that introduce it to the Philippine market.

BuyBitcoin.ph is one such company, headed by balikbayan co-founder and CEO Sam
Kaddoura, along with founders Lasse Birk Olesen (CPO), Daniel Walton (CTO), and James
Florentino (UI / UX Designer). Kaddoura describes the platform as “a peso to bitcoin ‘over-the-
counter’ exchange allowing Filipinos direct access to buying and selling bitcoins.” Kaddoura
continued, “As the popularity of bitcoin increases and it becomes more widely accepted as a
currency, the bitcoin exchange model will play a crucial role in providing a foundation for both
individuals and local businesses in the Philippines bitcoin economy to flourish.” In other words,
such exchanges are important for they work both ways. They allow individuals and merchants to
buy Bitcoin when necessary. On the flipside, they also allow them to “cash out” their Bitcoin for
fiat money – the Philippine peso.

Adoption

Of course, with a technology as exotic as Bitcoin, individuals and merchants first have to
buy into the concept before they actually buy the cryptocurrency. At the moment, the current
profile of the average user on BuyBitcoin.ph is what you would expect: They’re tech-savvy,
cryptocurrency enthusiasts. Kaddoura describes the individuals that trade on his exchange as
having this profile. He said, “Based off information from our customer database, our average
user is male, between the age of 25 to 34, mostly working in a technical field such as
engineering or computer science.” Kaddoura and his team want to aggressively move beyond
these early adopters to include other demographics. Kaddoura said, “We’d like to reach out to
everyone outside of this group as well! We have some plans to target new markets, such as
hosting local information sessions and promoting through the blogosphere and social media.”

Kaddoura tells merchants that Bitcoin “would allow them to tap into a new customer
demographic, those being bitcoin enthusiast who seek more places to spend their bitcoin. The
security features built into the bitcoin protocol also help reduce fraud, as it is much harder to
steal someones bitcoin wallet vs. snatching a credit card.” Kaddoura continued, “Additionally,
lower processing fees and faster settlement of transactions are some attractive reasons to have
your business accept bitcoin.” The benefits of using Bitcoin for individual consumers are similar,
but more unique to the Philippine context. “From the consumer perspective, not everyone in the
Philippines can get approved for a credit card,” Kaddoura said. “In many instances, consumers
will just run to the bank to physically make the deposit if they are purchasing something online.
However, if you’ve bitcoin in your wallet, you would never have to leave your house to make
payment. A few clicks and confirmations and the transaction is done.”

Thus, Bitcoin evens out the playing field – it allows consumers to more conveniently
participate in e-commerce, even if they may not meet the financial requirements necessary to
obtain a credit card. Yet even in these cases, security would be a concern, especially given that
many exchanges, such as the infamous Mt. Gox, have had their users’ coins stolen. As such,
Kaddoura makes it a point to be readily transparent about security to all potential BuyBitcoin.ph
users, who may have legitimate fears about cryptocurrency exchanges. “We’re taking all
precautions that we feel are necessary with our exchange,” he said. “Before we roll out new
features, we do extensive testing to make sure there are no loopholes that could be abused by
scammers. Currently, BuyBitcoin.ph isn’t exposed to the same technical requirements that an
exchange such as Mt. Gox would be exposed to.” Kaddoura went on, “We currently don’t hold
deposits of our customers peso or bitcoin, but it isn’t out of the scope of possibility that one day
we do begin hosting online wallets. If or when that day arrives, there will be rigorous testing of
our system to ensure that all funds are backed up 100% by btc/peso held on reserve. Bitcoin
audits are already being conducted on some of the worlds largest exchanges. Security is now
the name of the game in hosting bitcoin exchanges.”

Bitcoin’s future

As hinted at in the discussion of security above, the challenges of operating as a

Bitcoin exchange tend to be universal. Kaddoura elaborated, “The biggest technical
roadblock for widespread Bitcoin adoption in the Philippines are the same roadblocks for
widespread adoption elsewhere. Bitcoin is still a volatile asset, fluctuating in value, which
can turn a lot of people off.” Yet Kaddoura believes Bitcoin will eventually achieve stability –
based in part on how past commodities have performed. He said, “There is still much
speculation, but if you view bitcoin as a commodity, and compare it to petroleum in its’ early
days (before its widespread use), you can find similarities. The price of petroleum eventually
leveled off.”

The technical requirements to buy and trade in Bitcoin are incredibly simple.
Kaddoura said, “As far as getting bitcoin in the hands of the average Filipino, its quite easy.
Simply having access to a computer or mobile phone with internet is all you need.” The real
challenge comes down to the cultural education that must go along with promoting Bitcoin
and BuyBitcoin.ph. Kaddoura said, “The cultural roadblock will be in educating the
population. If people don’t realize the benefits of the technology or that there is a use for it
(i.e. a place to spend it), why would they ever consider adopting it? This is why it will be
important that the bitcoin economy grows proportionally in both consumers and merchants.”
Kaddoura and his team hope to distinguish themselves from other Bitcoin players in the
Philippine market in how they address all of the above, along with their user-friendly
approach. Kaddoura wants BuyBitcoin.ph to be known for “solid customer service and fast
order processing,” in addition to new features they will roll out for their users in the coming
months.

Balikbayan

What’s interesting about Kaddoura’s vision for Bitcoin and BuyBitcoin.ph’s place
within it, is that the entrepreneur is originally from Orlando, Florida. His return as a
balikbayan in April 2013 is part of a growing trend of Filipino-Americans who see the
Philippines as a place where business opportunity is ripe. Yet rather than simply set up any
kind of business, Kaddoura and others like him are determined to innovate and uplift the
Philippines through tech entrepreneurship. Kaddoura, in particular, brings with him a unique
constellation of skills that will benefit both BuyBitcoin.ph and the country as a whole.

Based on his experiences, Kaddoura is keen on pitching the Philippines itself to

would-be entrepreneurs from other countries. He said, “It’s a great time to be an
entrepreneur in the Philippines because of the blossoming startup scene. I've been
preaching to a lot of my friends back home to move out here because of the opportunities. A
good plan and hard work can really pay off.”5

Solon Pushes E-Peso Act

An administration lawmaker is pushing for the immediate passage of a bill seeking to

create the “E-peso” as a medium of exchange for Internet transactions. Pangasinan Rep. Kimi
Cojuangco, author of House Bill 4914, said there is an urgent need to enact the proposed “E-
Peso Act of 2014” since there is no official medium of exchange or money for the Internet.
“What exists is a patchwork of methods using traditional credit systems, which act in place of
money on the Internet. The E-peso is the electronic equivalent to the paper peso,” Cojuangco
said. She said the E-peso would be a legal tender and legal payment for debt, taxes, goods and
services transacted through the Internet.

Under the bill, the E-peso shall be recognized as the electronic legal tender and shall be
available in all banks branches operating in the country. The lawmaker said the amount in
circulation of the E-peso would be limited to P1 billion in the initial two years. The bill mandates
the Bangko Sentral ng Pilipinas (BSP) to explore and study the technology of “bitcoin and post
bitcoin cryptocurrencies” to expand the knowledge base, which it would use in deciding what
technology to use in E-peso. “The BSP will also choose a system that uses peer to peer
processing of the log chain and shall exert its utmost to leverage existing hardware being used
by the other leading cryptocurrencies such as bitcoin,” the bill stated. The proposed bill further
stated that the BSP shall mandate all bank branches to dedicate at least one computer with
adequate technical specification to serve as a local peer. An initial amount equivalent to one
percent of the total amount of Philippine currency in circulation shall be minted by the BSP
within one year from the enactment of the proposed act, the bill outlined.

Bitcoin is a new currency created in 2009 by an unknown person using the name
Satoshi Nakamoto for use in transactions in the Internet. Bitcoins are not tied to any country or
subject to regulation. The use of bitcoins do not require transaction fees. Bitcoins are stored in a
“digital wallet” that also allows buyers or sellers of various products to transact business
anonymously. According to buybitcoin.ph, the value of one bitcoin is about P16,000 to P17,000
depending on the current market conditions.6

5 Ezra Ferraz Published 3:45 PM, March 29, 2014. Updated 1:51 PM, April 06, 2014
rappler.com/business/features/54198-sam-kaddoura-buybitcoin-bitcoin
6
By Paolo S. Romero (The Philippine Star) | Updated October 5, 2014 - 12:00am
philstar.com/business/2014/10/05/1376516/solon-pushes-e-peso-act
 In my research, it seems that bitcoins are not that popular yet here in the Philippines
because we seem to not trust the legality of such digital currency or money as a mode of
payment or even a negotiable instrument, although there are still some who uses it for their daily
transactions and even a bill passed for the recognition of an electronic legal tender. In such
circumstance, what will be discussed below are bitcoins in relation to Negotiable Instruments
Law, although it talks about the laws of a different country.

Bitcoin Will Succeed via Innovation, Not Laws (Op-Ed)

Considering the varying patchwork of today’s global regulatory landscape regarding

cryptocurrency, Bitcoin’s greatest ally will not be a judge but technological innovation that will
enable it to be one step ahead of anti-competitive laws and unfriendly jurisdictions.
Indeed, Bitcoin is yearning for adoption, but that is not coming easy or fast enough for
some. The majority of world’s citizenry still has no idea of the opportunities the technology can
offer. While the Bitcoin ecosystem is ready to move forward and change this situation, unclear
and unfriendly legal environments seem to hold it back.

Reading through the July 2015 published The Law of Bitcoin, a book authored by a
group of 10 lawyers and academics from the United States, Canada, the United
Kingdom and Germany, reinforces a contrary opinion. For instance, in a few chapters focused
on Bitcoin’s place within the Canadian law, Stuart Hoegner, a lawyer and accountant and
member of the Bitcoin Alliance of Canada, explores the possibility of drafting negotiable
instruments such as promissory notes and bills of exchange and denominating them in bitcoin.
He explains this within Canada’s Bill of Exchange Act, which represents well the law on
negotiable instruments in the Commonwealth and, indeed, in many western countries, a bill of
exchange or a promissory note must be denominated in a legal tender currency, one that is
issued by a country.
That, of course, makes a negotiable instrument denominated in bitcoin likely void. In
other words, if you accepted such an instrument, and the drawee declines to honor it, the courts
are not obligated to provide you with any helpful recourse.
“Cryptocurrency-denominated instruments do not appear to qualify as negotiable instruments
under federal legislation,” reads an excerpt from The Law of Bitcoin. “We should not be taken as
saying that this is a failure of any cryptocurrency, or that bitcoin, as an example, is bound to fail,
in Canada or elsewhere.” It continues: “Although it may result in some market exclusions,
cryptocurrencies may generate their own solutions and grow to become more powerful tools in
international finance and trade.”
Now, the question is does bitcoin even need a law that recognizes it as money to play a
role in such business credit arrangements? There is no doubt that negotiable instruments have
played a major role in finance and trade for many centuries. Apparently the first known
existence of a bill of exchange goes back to the 8th century Arab world. Thus, it’s no surprise
that a 21st century monetary system, i.e. Bitcoin, encounters a lot of friction when interacting
with this old way of handling credit in trade. With that said, it is critical to recognize that these
instruments are nothing more than contracts where person A promises to pay person B or the
document holder at a given date or on demand.
Negotiable instruments out, smart contracts in
Like all contracts, enforcement of the agreement is crucial. The person accepting a bill of
exchange or a promissory note must have relative confidence that the court would come to his
defense in case the instrument is not honored. The good news is that innovations on top
of blockchain technology seem to provide better tools, such as proof of information, immutability
of data and self-execution, for enforcing such contracts.
This way, so called smart contract applications provide a way in which Bitcoin can
become an integral part of trade and commerce. While they do not take away the role of courts,
the applications give confidence to users to try the new technology in the absence of relevant
laws without the fear of losing their value in the process.
Indeed, it is clear that Bitcoin and cryptocurrencies do not even need to be on any
negotiable instruments in the traditional sense.

Innovation or Bust
Bitcoin and the other cryptocurrencies will continue to face suppression in finance and trade via
“regulation” like New York State’s BitLicense for example, that create barriers for potentially
disruptive startups and would-be competitors.
Therefore, just like the internet in the 1990s, digital currency and its fledgling ecosystem will
largely have to rely on innovation to grow as current laws favor legacy firms and the status quo.
Having smart contracts replace negotiable instruments is a good example of how the
blockchain technology will permeate into everyday use.

(*NOTE: Blockchain is a database displayed publicly for every Bitcoin transaction that happened
in the Bitcoin network. It is needed to independently verify the chain of ownership of every
bitcoin amount. A block is a file which is recorded permanently and contains information on all
transactions that already happened in the chain. This allows bitcoin software to determine when
a particular bitcoin amount has been spent, which is necessary to prevent double-spending in
an environment with no central authority.)7

Is Bitcoin a Payment Instrument in the Philippines?

Bangko Sentral ng Pilipinas (BSP), has issued a warning on bitcoin which echoes
similar statements issued by regulators worldwide over the past few months. BSP
acknowledged that digital currencies like bitcoin are "now being exchanged in the
Philippines" but stressed that they remain a relatively risky investment. Additionally, it
warned that digital currencies and digital currency exchanges are not regulated by national
regulators and thus consumers would not be protected from losses if an entity holding
digital currencies went under. BSP pointed out that there is no assurance that any digital
currency would be stable or exchangeable. The value can be highly volatile and digital
currencies can be used for illicit purposes, it stated.

In terms of consumer advice, the bank outlines "things to think about before buying,
holding or trading", including: loss of value, theft, lack of consumer protection and the

7Author Daniel O. Nyairo, 2015-08-02 12:40 PM. cointelegraph.com/news/bitcoin-will-succeed-via-innovation-

not-laws-op-ed
possibility of having assets frozen. The bank stresses that exchange platforms are
unregulated and that there is no protection for investors in case of failure: "At present, there
have already been a number of cases where virtual currency exchange platforms have
gone out of business or have failed."

The risk of theft is real and digital wallets are not entirely safe, while at the same
time consumers who purchase goods and services for bitcoin cannot rely on consumer
protection regulation in case something goes wrong. Volatility is another concern, as is the
fact that nobody can guarantee exchange, it stated.

Lastly the misuse of digital currencies can lead to criminal investigations and asset
freezes – even investors who acted in good faith can have their assets frozen as part on a
wider investigation (i.e. in case authorities opt to close an exchange platform). Like other
regulatory warnings on digital currencies, the BSP statement is unlikely to have much of an
effect on the country's bitcoin user base. Although the Philippines isn't bitcoin's biggest
community, the country remains a very interesting market for a number of reasons, mainly
remittances. Back in January a team of bitcoin enthusiasts launched BuyBitcoin.ph, an
exchange geared toward remittances. With good reason – there are an estimated 2.2
million Filipino expats in Asia and the rest of the world, and their contribution to the local
economy is huge. In 2013 alone they wired more than $13.9bn to the island nation. To put
this in perspective, the country's GDP is around $250bn. Eliminating transfer fees in the
remittance process could be a boon for many expats and their families back home.8

CONCLUSION

Indeed, in the not-so-distant future, there’s a big chance that money will lose its power
and currency transactions will be done using Bitcoin. We cannot deny that we are moving
forward to a progressive future and we may never know what the future holds in the world of
commerce and the in the negotiable instruments. We even make jokes before about cell
phones, laptops and man flying to the moon, until we have proven that these things are
practical. So it is not also impossible that bitcoin may also be used as a negotiable instrument in
the future. However, it is also indisputable than the current status of bitcoin is not reliable and
that there are no existing laws to protect the rights of the parties who may be aggrieved.

I therefore conclude that, although bitcoin may be a substantial asset in the world of
business and may help expand the growth of our economy, we need to conduct further
research and improve the utilization of bitcoin to be more effective and beneficial rather than
detrimental to the general public as a negotiable instrument or as an essential part of payment
systems in exchange for the provision of goods, services or both, or to fulfill a legal obligation.
We need to have laws enacted defining and limiting the operation of bitcoins to protect the
interests of the people and also for further development of our economy.

8
Nermin Hajdarbegovic | Published on March 10, 2014 at 16:38 BST. coindesk.com/philippines-regulator-issues-
warning-digital-currencies/
 NEGOTIABLE INSTRUMENTS LAW

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS IN

NEGOTIABLE INSTRUMENTS LAW

RESEARCH PAPER

ON

BITCOIN

Submitted by:

CIANO, CHARITY D.

Submitted to:

ATTY. BERNADETTE C. MENDOZA

Submitted on:

April 29, 2016