MANILA NODE, 2018 COMPUTATIONAL LAW &

BLOCKCHAIN FESTIVAL, DISCUSS TRACK

SYMPOSIUM REPORT

Amanda Dominguez*

INTRODUCTION

On March 17, 2018, ConsenSys, in partnership with Microsoft and

UnionBank of the Philippines, hosted the Manila node of the first annual
2018 Computational Law & Blockchain Festival (“CL+B”), a decentralized
international festival with self-organized node cities from around the world.
The festival focused on educating the general public through discussions on
the policy implications of blockchain technology, and sponsored a 24-hour
global hackathon focused on building solutions related to computational law
and blockchain-for-law use cases.
A total of 130 participants attended CL+B Manila including members
of the blockchain and cryptocurrency community, lawyers, high school ICT
students, and policy-makers. Also in attendance were regulators from the
Department of Trade and Industry (“DTI”), National Privacy Commission
(“NPC”), Department of Public Works & Highways (“DPW”), Securities
Exchange Commission (“SEC”) and most notably, the Bangko Sentral ng
Pilipinas (“BSP”)1, including its Deputy Director and Head of the Core
Information Technology Specialist Group, Mhel Plabasan.

THE DISCUSS TRACK

ConsenSys kicked off the event by defining legal hacking as the

process of developing creative solutions to issues at the intersection of law
and technology, “inspired by the ethos of the original MIT hackers of the
1950s and 1960s. The output of legal hacking could be a tech-based solution
(e.g., legal tech, reg tech, or civic tech), an improvement in legal services

* Lead, Government and Stakeholder Relations (Asia-Pacific) at ConsenSys.

1
The Central Bank of the Philippines.

73
74 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 1.1

delivery, or a new way of addressing a public policy issue such as data

protection, intellectual property, or the sharing economy.” 2 Thus, the
mission of the festival was made clear: to collaborate on creative solutions
to the issues we are facing today in the wake of a rapidly evolving
technological landscape; to equip ourselves both technologically and legally
to mitigate risks to our safety and autonomy; and to pave the path for an
emerging blockchain technology that has the capacity to disrupt socio-
political and economic systems for the better.
As one of the leading blockchain advocates in the Philippines,
UnionBank executives Justo A. Ortiz (Chairman), Edwin R. Bautista
(President & CEO), and Arvie de Vera (Head of Fintech Business Group),
delivered a joint keynote: “A Blockchain Future for the Philippines.” Ortiz
and Bautista shared their vision of a peer-to-peer world with inclusive
prosperity, which blockchain provides by eliminating the “cost of trust,” or
the cost of the middleman. To some, it may seem incongruous that a bank or
traditional financial institution is working to disrupt its own industry. Ortiz
rhetorically asked, “Why develop systems that compete with traditional
banking?” And answered by stating that UnionBank “cannot sustain
business by trading on uncertainty and instability.” He asserted that
empowering Filipinos through digital transformation will allow the
Philippines to participate globally with significant impact.
De Vera then introduced the inter-rural bank payment and settlement
platform that UnionBank is currently building, for which ConsenSys is a
strategic advisor. The mission of this project is to allow for more efficient
back-end operations in order to provide real-time services to the
underserved rural client-base, and allow them to participate in the domestic
financial ecosystem. De Vera stated, “Blockchain doesn’t just enable
connectivity, it also has a real impact on productivity.” With this in mind, de
Vera is hopeful that increased productivity will lead to GDP growth via
financial inclusion.
CL+B Manila then began the Discuss track with a highly anticipated
panel on the Virtual Currency Circular No. 944,3 issued by the BSP in
January of 2017 to regulate virtual currency exchanges in the Philippines.
The issuance of this circular established the Philippines as one of the first
governments in the world to have a regulated virtual currency exchange

2
Our Story, LEGAL HACKERS, https://legalhackers.org/our-story. Hacker culture as we know
it today stems from a movement that began at MIT in the 1950s, wherein members of the
Tech Model Railroad Club ventured to take control over telephone services. Ben Yagoda, A
Short History of “Hack,” THE NEW YORKER (Mar. 6, 2014), available at
https://www.newyorker.com/tech/elements/a-short-history-of-hack.
3
OFFICE OF THE GOVERNOR, BANGKO SENTRAL NG PILIPINAS, GUIDELINES FOR VIRTUAL
CURRENCY (VC) EXCHANGES, available at
http://www.bsp.gov.ph/downloads/regulations/attachments/2017/c944.pdf.
2018] MANILA NODE, 2018 CL+B FESTIVAL SYMPOSIUM REPORT 75

industry. The panel was moderated by Rafael Padilla, Legal and Compliance
Head of SCI Ventures, one of the two licensed virtual currency exchanges in
the country. Panelists included Mhel Plabasan (Deputy Director and Head of
the Core Information Technology Specialist Group of BSP), Maria
Gainatinou (Compliance Officer of Coins.PH), the only other licensed
Philippines-based virtual currency exchange), and Bryant Casiw (Managing
Partner of BCG Law), who represents applicants for the virtual currency
exchange license.
The discussion addressed the complexities of applying for the licence,
specifically for start-ups struggling to meet the compliance requirements of
the BSP. While the BSP is working to enable the cryptocurrency industry to
flourish in the Philippines, it remains vigilant and selective, protecting both
entrepreneurs and its customers.
Next, the panel on the “History and Future of Technology in the
Philippines,” brought together two pioneers from the IT and Business
Process Outsourcing (“BPO”) industry and co-founders of the IT and
Business Process Association of the Philippines (“IBPAP”), Karen
Batungbacal and Dan Reyes. They addressed best practices from industry
builders, specifically in working with government to exponentially grow the
industry in the last twenty years to what it is today: a driver of economic
growth in the Philippines directly employing 1.5 million Filipinos, and
through the multiplier effect, indirectly providing 3 million more jobs for
Filipinos. Throughout the years, IT and BPO pioneers worked hand-in-hand
with, as Batungbacal stated, “heroes in government” to influence policy and
legislation to support the development in their industry, a legacy that the
blockchain community in the Philippines should both maintain and further.
This panel was also designed to understand the pain points that the industry
currently faces, and identify how blockchain can, perhaps, fill in the gaps.
For the remainder of CL+B Manila, ConsenSys organized six breakout
sessions led by members of the global ConsenSys mesh and the local
blockchain community, including lawyers and technologists: Taxation,
Securities Law and Regulating ICO’s/Token Launches; The Digital Divide:
Democratizing the Internet; Smart Contracts as Legal Contracts; Privacy,
Security and National Identity; Governance in a Digital Decentralized
World (a session designed for law students); and a closed-door roundtable
discussion for government, Digital Governance Frameworks within Local,
Regional and National Government. Each session combined both
technological and legal expertise in blockchain to provide a balanced and
collaborative discussion around each topic, while honoring the decentralized
nature of the Festival through video conferencing provided by the
ConsenSys mesh. In addition, ConsenSys set up a viewing room for
livestreams of other CL+B nodes around the world to expose participants to
other contexts for public policy discourse on blockchain.
76 STANFORD JOURNAL OF BLOCKCHAIN LAW & POLICY [Vol. 1.1

With the steadily rising number of cryptocurrencies and tokens being

launched everyday, “Taxation, Securities Law and Regulating ICOs/Token
Launches” attracted a large audience. This session was lead by ConsenSys’
Global Business Development & Partnerships Lead John Lilic, and co-
facilitated by Colin Goltra of Coins.PH and Jin Gonzalez of the UnionBank
Fintech Group. Lilic addressed the taxonomy problem of cryptoassets: they
are difficult to categorize due to various and often multiple utility functions,
and are likewise difficult to regulate. Both the BSP and SEC recognize this
complexity and are currently coordinating their efforts to identify where
their regulations will necessarily overlap in order to provide a growth-driven
regulatory framework for digital assets. Highlights of the discussion from
the private sector standpoint included Coins.PH’s pushback against the
notion that Bitcoin is trustless as it establishes itself as a “trust-business”
that chooses to comply with all relevant regulatory bodies (as the first
fintech company to obtain the Virtual Currency License from the BSP).
Also notable was UnionBank’s full support for the movement in blockchain
towards self-sovereign identity, and for ensuring fiduciary responsibility to
its clients, which requires proper checks and balances for cryptoassets.
“The Digital Divide: Democratizing the Internet” was led remotely by
ConsenSys’ Thomas Miller, a blockchain developer whose passion is to
empower communities to be self-sufficient in terms of access to fiber
networks. His audience was comprised mainly of high school ICT students
looking to improve the state of the internet in the Philippines today by
improving its accessibility.
“Smart Contracts as Legal Contracts” was delivered by Rafael Padilla
after a brief technical introduction by UnionBank’s Gerb Inajada. Padilla
framed the discussion around the Electronic Commerce Act (Republic Act
No. 8792), under which smart contracts can be considered legal contracts if
key requirements such as consent, object of contract (which in substance
must not be contrary to law or public policy), and cause of obligation are
met.
“Privacy, Security and National Identity” was led by JJ Disini of Disini
& Disini Law. In an interview regarding the session, he stated:

Because the Internet was not designed to validate the identity

of users, it has become necessary for users to individually
establish trust and reputation in order to facilitate commercial
transactions. These have been achieved in part by online
feedback or peer review mechanisms such as those employed
by AirBnb or Ebay. However, we have seen such peer-review
systems exploited, resulting in less-than-reliable rankings in
sites such as TripAdvisor which recently saw a non-existent
restaurant rise to become the top-rated food outlet in London.
2018] MANILA NODE, 2018 CL+B FESTIVAL SYMPOSIUM REPORT 77

In the face of these challenges, blockchain technologies may

prove to be useful in establishing one’s identity in a distributed
network. This can be done by recording proofs of identity—
documents as well as records of online transactions—on the
blockchain. This allows the data subject to create an
authoritative data trail that is independently verifiable, and
despite being housed in separate locations, [the data is]
inextricably linked by the data subject’s key pair. Additionally,
the data subject can maintain control over such information by
issuing tokens that permit third parties to decrypt such
information for further use. Encryption can also aid the data
subject to preserve a level of anonymity necessary to exercise
civil liberties, and ultimately, hold State actors accountable.
While the specific technology or protocols are not yet in
existence, any solution will likely arise from a mixture of
market-provided technologies as well as norms of behavior
arising from online interactions or repeated commercial
dealings.

In support of Disini’s argument for blockchain as a solution for the

pain points the Philippine currently faces with regard to the legal landscape
and lack of identity infrastructure, Pelle Braendgaard, technical lead for
uPort (ConsenSys’ blockchain identity system), presented a demo of the
product and explained its technical intricacies. The demo was well-received
by the mostly public sector participants, including a member of the National
Privacy Commission. Noted in the conclusion of the discussion on uPort
was its need to be tested on a small scale, following the implementation of
the system in Zug, before growing the user base to a national scale.