Philippines Central Bank Imposes Payment Operator Registration Freeze, Tightens VASP Controls

One-Year Freeze on Payment System Operator Registration

The Philippines’ central bank has announced a major regulatory shift, proposing to freeze approvals for new payment system operators while simultaneously strengthening oversight of virtual asset service providers. According to the Bangko Sentral ng Pilipinas (BSP), as reported by Cointelegraph, the regulator intends to suspend payment system operator (OPS) applications for a 12-month period to conduct a comprehensive review of its regulatory framework and licensing taxonomy.

Applications already filed before the moratorium begins would remain under consideration but would neither be approved nor denied during the pause. Entities seeking to launch services that require payment system operator registration would be barred from commencing operations unless the regulator grants explicit authorization outside the standard process. This effectively halts all new market entry for payment system operators across the country.

Enhanced Requirements for VASP-Institution Relationships

Beyond the registration freeze, the draft circular introduces stringent standards governing how BSP-supervised financial institutions structure arrangements with virtual asset service providers. VASPs offering merchant acquisition services must now establish direct merchant relationships with financial institutions, eliminating intermediated arrangement models.

These relationships would be subject to enhanced due diligence procedures, continuous transaction monitoring, predetermined transaction and settlement limits, and risk-based controls calibrated to each arrangement’s specific risk profile. The requirements apply to any virtual asset firm requiring licensing, registration, or authorization from the BSP, the Philippine Securities and Exchange Commission, or comparable authorities. The regulator has explicitly grouped VASPs in the same oversight category as gambling operators, gaming providers, adult-oriented businesses, and money service businesses, signaling that cryptocurrency firms now face comparable regulatory scrutiny.

Implementation and Global Regulatory Momentum

The proposed measures would take effect 15 days after official publication, provided the BSP finalizes the circular. The central bank is currently accepting public feedback on the draft. This regulatory tightening reflects broader global momentum toward stricter oversight of virtual asset operations, particularly regarding merchant service integration and anti-money laundering compliance. By imposing transaction limits, enhanced due diligence, and direct relationship requirements, the BSP aims to manage financial stability risks while integrating digital asset services into the traditional banking system.

Regulatory frameworks that increase institutional barriers could reshape how digital assets like XRP compete for payment corridors and institutional adoption across Asia-Pacific markets.

Source: Bangko Sentral ng Pilipinas, via Cointelegraph. Not financial advice.