Philippine Central Bank Proposes Freeze on Payment Operator Registrations and Tighter Controls on VASPs
The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has issued a draft circular proposing a 12-month freeze on new payment system operator (OPS) registrations to conduct a comprehensive review of its taxonomy and licensing framework. Additionally, the BSP aims to tighten regulations on financial institutions dealing with virtual asset service providers (VASPs), mandating enhanced supervision, due diligence, and transaction limits for these entities.
Proposal to Suspend Payment System Operator Registrations
The BSP proposed a 12-month suspension on the acceptance and processing of new payment system operator applications. This measure aims to facilitate a comprehensive review of the current taxonomy and licensing framework governing payment systems in the country. Applications submitted prior to the suspension will undergo evaluation, but no approvals or denials will be issued during the freeze period. Entities will be prohibited from commencing activities requiring OPS registration unless explicitly authorized by the regulator.
Enhanced Requirements in Dealing with Virtual Asset Service Providers
BSP-supervised institutions offering merchant acquisition services are required to engage directly with licensed, registered, or authorized VASPs under heightened due diligence and monitoring protocols. These include transaction and settlement limits and additional risk-based controls. The regulatory scope covers virtual asset firms authorized by BSP, the Philippine Securities and Exchange Commission, or other competent authorities.
VASPs Classified Alongside Other High-Risk Sectors
The draft circular places VASPs on the same list as gambling businesses, gaming providers, adult-oriented businesses, and money service businesses. This alignment indicates the regulator’s intent to treat virtual asset activities as high-risk sectors, subjecting them to correspondingly rigorous supervisory standards.
Next Steps and Opportunity for Public Feedback
Should the circular be finalized, it will come into effect 15 days post-publication. The BSP is currently soliciting public comments on the draft. Cointelegraph reached out to BSP for further details but had not received any response at the time of publication.
Why it matters
The proposal by the Philippine central bank underscores a tightening of regulatory measures over electronic payment operators and virtual assets within the country. The freeze on new payment system operator registrations facilitates a thorough reassessment of the existing licensing framework to enhance oversight. The enhanced due diligence and controls imposed on VASPs respond to risks such as money laundering, terrorism financing, and other abuses inherent in digital assets. Identifying VASPs alongside other high-risk industries signals a regulatory intent to apply stringent standards to this emerging sector. Such measures are crucial for increasing transparency, security, and overall resilience of the Philippine financial ecosystem.
Prepared from the source material with AI-assisted editing and checked against the supplied facts.
Open original source ↗