Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

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SIXTEENTH CONGRESS are, 28 AUG CON
Second Regular Session ME Ay oY

HOUSE BILL No. 4914

Introduced by Honorable Kimi S. Cojuangco

EXPLANATORY NOTE

The phenomenon of the internet has now been with us, the general public,
for over two (2) decades. Its ability to speed up the transfer and
manipulation of information is now common knowledge and undisputed.

Already, the internet has created many industries which would have been
impossible without it. Such industries are no longer bit players in the
country’s economy. In fact, a large part of economic growth will surely be
derived from internet based or assisted industries and their online
transactions, as is already happening today.

At present, no official medium of exchange, or money, exists for the
internet, What exists is a patchwork of methods using traditional credit
systems, which act in place of money on the internet.

‘The Creation and Adoption of an Electronic Peso is, therefore, an idea
whose time has come!

‘This Bill seeks to mandate the creation, adoption, and perfection of an
Electronic Peso (E-Peso).

‘The amount in circulation of which will be limited to One Billion Electronic
Pesos in the initial two (2) years, beta phase, of its existence. Further
"minting" of "E-Pesos", will be subject to processes as specified in the Bill

Since E-Pesos do not wear out, special considerations for its control, and
periodic retirement are laid out in other sections of this proposed bill.

Other than which, the E-Peso is in any and every other way, the equivalent
of the physical Peso.

It is the author's hope that the E-Peso, in convenient general circulation,
will be an additional path to boost the country's transaction velocity,


economic growth rate, and that it will also serve to be a major convenience
for all our people.

‘The approval of this proposed measure is therefore earnestly recommended.

Hon ,/KIMr 8. £0. GC}


Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Second Regular Session

HOUSE BILL No. 4914

Introduced by Representative Kimi S. Cojuangeo

AN ACT
CREATING AN ELECTRONIC PESO AS A MEDIUM OF EXCHANGE
OR AS MONEY FOR USE ON THE INTERNET AND ALL OTHER
ELECTRONIC AND NON-ELECTRONIC MEANS OF
COMMUNICATIONS, APPROPRIATING FUNDS THEREFOR AND
FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

Section 1. Title. - This Act shall be known as the "Electronic Peso or
E-Peso Act of 2014".

Sec. 2. Declaration of Policy. - It is hereby declared the policy of the
State to create and provide money, legal tender, which can be used as a
medium of exchange for the purchase of goods and services on the
internet.

Such digital money or currency shall be the electronic analogue of the
paper peso in all its denominations, and which shall be divisible up to one
(1) centavo.

‘The State shall not default or abrogate this responsibility to private
entities.

Sec. 3. Nature of E-Peso. - - The E-Peso is the electronic equivalent to
the paper peso. All rights, obligations, attributes, and characteristics
accruing to the paper peso shall also accrue to the E-Peso. The E-Peso is
legal tender, and a valid and legal payment for debts, taxes, goods and
services transacted through the internet.

Being a legal tender, the E-Peso cannot therefore be denied as a valid
mode of payment.


See. 4. Use of Transaction Ledger. - ‘The E-Peso shall use a
transaction ledger system to assure its authenticity, as security against
counterfeiting and as a guard against double or multiple bookings of a single
transaction. The transaction ledger system is to be called a log chain, Each
newly minted E-Peso will have its own unique log chain. Each log chain will
be divisible in synchrony with its mother E-Peso denomination.

The best such log chain technology at the time of minting shall be
determined by the Bangko Sentral ng Pilipinas. Such technology may be
adopted, purchased, or developed in house by the Bangko Sentral ng
Pilipinas. In addition, the Bangko Sentral ng Pilipinas may consider the use
of peer-to-peer data processing for a part or all of the data processing
requirements of E-Peso.

Sec. 5. Cost, - The cost to have the E-Peso in circulation, which shall
include all costs from minting to retirement, will be capped and limited to
the same amount that it costs the Bangko Sentral ng Pilipinas to circulate
the equivalent total face value of Paper Pesos, which shall be calculated by
using the same distribution of denominations on a pro-rata basis.

See. 6. Limitation on E-Peso Retirement, - Until the Bangko Sentral ng
Pilipinas shall gain six (6) years of operational experience, the B-Pesos in
circulation will be retired upon their being received at any bank and with
their log chain showing that they have completed at least twice as many
transactions as their paper peso counterparts.

‘This limitation may be extended by the Bangko Sentral ng Pilipinas

after this period, if deemed appropriate by its technical staff and Governing
Board.

Sec. 7. Initial Minting. - An initial amount equivalent to one percent
(1%) of the total amount of Philippine currency in circulation shall be
minted by the Bangko Sentral ng Pilipinas within one year from the
effectivity of this Act. Replacement minting shall be only be done for lost or
destroyed units. (As of 31 December 2013, the total amount of Philippine
currency in circulation is Php7.97.450 billion)

See. 8. Condition for Subsequent Minting. - No other minting shall
occur for a period of five (5) years, and only if the Bangko Sentral ng
Pilipinas ascertains that the E-Peso technology is proven secure. The
Bangko Sentral ng Pilipinas shall define and publish what "secure" means,
in consultation with the Oversight Committee created under Section 17 of
this Act.

Sec. 9. Exclusivity of E-Peso. - Only the E-Peso shall be recognized as
the electronic legal tender in the Philippines.

Sec. 10. Availability of E-Peso. - The E-Peso shall be available in all
bank branches of all kinds of banks operating in the country. It shall


comprise 0.5% of all cash on hand, initially, then to be maintained at not
Jess than 0.5% thereafter.

Sec. 11. Requirement on Business Establishment. - No business
establishment shall be allowed to have official electronic payment or money
transfer system unless denominated in E-Peso.

Sec. 12. Technology to be Used. - The Bangko Sentral ng Pilipinas
shall explore and study the technology of bitcoin and post-bitcoin
cryptocutrencies to expand its knowledgebase which it will use in deciding
which technology or combination of technologies to use for the E-Peso:
Provided, That, a peer-to-peer system will be used to verify the log chain of
E-Peso.

See. 13. Choice of System. - The Bangko Sentral ng Pilipinas will
choose a system which uses peer to peer processing of the log chain. It shall
exert its utmost to leverage existing hardware being used by the other
leading cryptocurrencies such as Bitcoin.

The Bangko Sentral ng Pilipinas may, in complementation and
augmentation of peer to peer processing, establish its own hardware centers
for the processing of log chain data, provided that it helps to lower E-Peso's
cost.

The Bangko Sentral ng Pilipinas shall mandate all bank branches, on
a pro rata transaction volume basis, to dedicate at least one (1) computer
with adequate technical specifications to serve as a local peer.

Sec. 14. Establishment of a Department. - The Bangko Sentral ng
Pilipinas shall establish a department to handle the E-Peso which is
equivalent of the BSP department in charge of handling the minting,
distribution and retirement of paper pesos. This new department shall be
given a corresponding equivalent yearly budget on a pro rata
denomination basis. It shall have a staffing pattern not less than ten percent
(10%) in head count or in personal services value than its equivalent paper
peso department.

See. 15. Promotion of E-Peso. - The Bangko Sentral ng Pilipinas shall,
for a period of five (5) years, renewable by the Oversight Committee, promote
through TV, radio, print media, and online advertising the use and virtues of
the E-Peso. The budget for such promotion shall not be less than Thirty
Million Pesos per annum.

Sec. 16. Use for International Transaction. - The E-Peso shall be
allowed and encouraged for international transactions, even if it involves
exchange with other currencies.


Sec. 17. Congressional Oversight Committee. - A Congressional
Oversight Committee, hereinafter referred to as the Committee, is hereby
constituted which shall be composed of the Chairmen of the Committee on
Banks of the Senate and House Representatives and four (4) additional
members from each house, to be designated by the Speaker of the House of
Representatives and the Senate President, respectively. The Oversight
Committee shall monitor and ensure the proper implementation of this Act

Sec. 18. Repealing Clause. - All laws, presidential decrees, executive
orders, rules and regulations or part thereof which are inconsistent with
this Act or with the rules and regulations issued pursuant thereto are
hereby repealed or modified accordingly.

See. 19. Separability Clause. - If any provision of this Act is declared
invalid or unconstitutional, the other provisions thereof not affected thereby
shall continue in full force and effect.

Sec. 20. Eifectivity. - This Act shall take effect after fifteen (15) days
following its publication in the Official Gazette or in any newspaper of
general circulation.

Approved,