Key Points

• The Bangko Sentral ng Pilipinas (BSP) has proposed a 12-month pause on new payment-system operator registrations while it reviews its licensing and classification framework.
• Payment institutions serving regulated virtual asset service providers (VASPs) could face enhanced due diligence, transaction limits and stricter monitoring requirements.
• The proposed controls would extend to VASPs overseen by the BSP, Philippine SEC or other relevant authorities, alongside other higher-risk businesses.

BSP Proposes 12-Month Payment Operator Registration Freeze

The Philippines’ central bank is proposing a temporary freeze on new registrations for operators of payment systems as it reassesses the regulatory framework governing the country’s payment sector.

Under a draft circular, the Bangko Sentral ng Pilipinas (BSP) would suspend the acceptance and processing of new applications for payment-system operators (OPS) for 12 months.

The central bank said the pause would allow it to conduct a “holistic review” of its existing taxonomy and licensing framework.

Applications submitted before the suspension would not necessarily be withdrawn. The BSP could continue evaluating them, but would not issue approvals or denials until the registration pause ends.

Companies would also be prohibited from beginning activities requiring OPS registration unless specifically authorized by the regulator.

VASP Payment Arrangements Face Enhanced Oversight

The proposal would introduce additional safeguards for payment arrangements involving virtual asset service providers.

BSP-supervised institutions offering merchant-acquiring services would be required to establish direct merchant relationships with regulated VASPs. Those relationships would then be subject to enhanced due diligence and ongoing monitoring.

The framework would also introduce transaction and settlement limits, alongside other risk-based controls designed to manage potential exposure associated with virtual asset businesses.

The measures indicate that the BSP is seeking greater visibility into how regulated payment infrastructure interacts with cryptocurrency companies rather than treating payment services connected to digital assets in the same way as lower-risk merchant relationships.

Controls Extend Across Regulated Crypto Firms

The proposed requirements would apply to virtual asset businesses that are required to be licensed, registered or otherwise authorized by the BSP, Philippine Securities and Exchange Commission or another relevant authority.

The BSP groups VASPs among several categories of businesses that may require heightened controls, including gambling and gaming businesses, adult-oriented businesses and money service businesses.

This classification reflects a risk-based approach in which payment providers may need to apply additional safeguards when dealing with sectors considered more vulnerable to money laundering, fraud or other financial-crime risks.

For cryptocurrency companies, stronger requirements at the payment-merchant level could affect how easily they access conventional financial infrastructure.

Draft Rules Await Industry Feedback

The proposal has not yet become final policy. The BSP is currently accepting feedback on the draft circular.

If finalized, the rules would take effect 15 days after publication.

The combination of a temporary registration freeze and stronger controls for VASP-related payment activity suggests that the central bank is using the review period to reassess how its payment-system framework should accommodate rapidly evolving digital asset businesses.

Outlook

The BSP’s proposal could mark a significant tightening of the Philippines’ approach to the intersection of payments and cryptocurrency. A temporary halt on new payment-system registrations would give the regulator time to reassess its licensing framework, while enhanced monitoring and transaction controls could raise compliance requirements for institutions serving VASPs. For the digital asset industry, access to regulated payment infrastructure may increasingly depend on stronger customer due diligence, transaction monitoring and risk-management systems.