The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has proposed tighter controls for payment activities. This regulation specifically involves virtual asset businesses. This comes as a result of a broader review of the country’s payment system framework.

Under the draft circular, BSP-supervised institutions providing services to virtual asset businesses would be required to establish direct merchant relationships with those entities. The proposed framework would also introduce enhanced due diligence and continuous monitoring. Moreover, transaction limits and other risk-based controls will also be introduced.

BSP Targets Crypto Payment Risks With Enhanced Controls

The Bank of Philippines proposed measures specifically place virtual asset service providers (VASPs) that require licensing from the BSP, Securities and Exchange Commission (SEC), or another competent authority. The controls are intended to strengthen monitoring of transactions involving crypto-related businesses.

Under the proposal, institutions dealing with crypto merchants would need to conduct enhanced due diligence. This would include maintaining ongoing oversight of their transactions. Limits on transaction and settlement activity could also be imposed based on the risks associated with individual merchants.

BSP Proposes 12-Month Freeze on New OPS Registrations

Alongside the crypto-related controls, the BSP has proposed temporarily suspending the registration of new Operators of Payment Systems (OPS) for 12 months. The central bank would stop accepting and processing new OPS applications during the proposed suspension. Applications submitted before the pause would remain subject to evaluation. However, the BSP would not approve or reject them until the suspension ends.

Entities would also be prohibited from beginning activities that require OPS registration during the freeze unless they receive specific authorization from the BSP. The temporary freeze is intended to give the BSP time to conduct a “holistic review” of its OPS taxonomy and licensing framework. If finalized, the proposed circular would take effect 15 days after publication. The BSP is currently seeking public feedback on the draft.