September 26, 2022

Central Bank of the Philippines Suspends VASP Registration for Three Years

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Central Bank of the Philippines Suspends VASP Registration for Three Years

Effective September 1, the Central Bank of the Philippines will impose a moratorium on accepting and reviewing new applications for a Virtual Asset Service Provider (VASP) license for three years.

In his address to the participants of the cryptocurrencyBangko Sentral ng Pilipinas (BSP) recognizes that VASPs provide users with opportunities to increase access to financial services while reducing costs. However, according to the regulator, in general, they pose a significant threat to the financial stability of the country.

In this regard, the Central Bank stops accepting applications forobtaining VASP licenses for 3 years, starting from September 1. The renewal of existing licenses will be subject to a re-assessment of the compliance of VASP suppliers with the current requirements of the regulator. In particular, we are talking about compliance with BSFI risk management systems, including customer suitability assessment and onboarding processes, as well as the existence of a financial education and consumer information program.

“Changes in the country's financial market requiredfrom BSP immediate decision making and a modified approach to VASP licensing. This strategically shifts the goals and focus of the Digital Payments Transformation Roadmap (DPTR) to evaluate the effectiveness of the risk management systems of existing BSP-registered VASPs and their impact on financial services and the financial inclusion program,” said Central Bank Governor Felipe Medalla.

In July, the Philippine Public Policy Center urged regulators in the country to investigate the operation of the largest crypto exchange, Binance, after the local Department of Commerce (DTI) rejected a request for a ban on activities.