Central Bank of the Philippines Suspends VASP Registration for Three Years

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

In his address to the participants of the cryptocurrencyThe Bangko Sentral ng Pilipinas (BSP) market recognizes that VASPs provide opportunities for users to expand financial inclusion 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. Renewal of existing licenses will be subject to re-evaluation of VASP suppliers' compliance with current regulatory requirements. This includes compliance with BSFI's risk management frameworks, including customer suitability assessments and onboarding processes, and the presence of a financial education and consumer awareness programme.

“Changes in the country’s financial marketdemanded immediate action from the BSP and a modified approach to VASP licensing. This strategically shifts the objectives and focus of the Digital Payments Transformation Roadmap (DPTR) to assess the effectiveness of the risk management systems of existing BSP-registered VASPs and their impact on financial services and the financial inclusion agenda,” said Central Bank Governor Felipe Medalla.

In July, the Philippine Public Policy Center called on the country's regulators to investigate the work of the largest crypto exchange Binance after rejecting a request to ban the activities of the local Department of Commerce (DTI).