BSP: Freeze on new crypto licenses stays

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has extended indefinitely its moratorium on the issuance of new licenses for virtual asset service providers (VASPs), as regulators move to guard against risks linked to the fast-evolving digital asset industry. The BSP’s Monetary Board approved the extension to give the central bank more time to strengthen its monitoring and enforcement tools, citing the “heightened risks” associated with virtual assets.

“The extension underscores the BSP’s commitment to protect consumers and uphold the stability and integrity of the financial system,” the central bank said.

Virtual assets refer to digital representations of value that can be traded, transferred or used for payment, such as cryptocurrencies. VASPs are firms that enable the exchange or transfer of such assets, including cryptocurrency exchanges.

The BSP first imposed a three-year freeze on new VASP applications in September 2022, citing the need to review its regulatory framework amid a surge of interest in crypto trading.

The moratorium was supposed to expire in September this year. But with the latest move, the suspension will remain in place until further notice.

The central bank said it would “periodically review” the moratorium in line with industry developments and global trends, but stressed that it must first ensure that its supervisory capacity keeps pace with risks posed by virtual assets.

The decision comes just months after the Philippines exited the Financial Action Task Force’s gray list in February, following reforms to strengthen the country’s anti-money laundering and counter-terrorism financing regime.

“The task includes close monitoring of VASPs so they operate in full compliance with regulations and international standards, and implement secure, transparent and accountable practices,” the BSP said.

It also came after the country was removed from the European Union’s list of high-risk third countries last month. In March, the United Kingdom removed the country from its own high-risk list as well.

In a separate advisory, the central bank reminded the public to exercise caution, conduct due diligence and refrain from transacting with unlicensed or unauthorized VASPs.

It also advised the public to immediately report any unlawful or suspicious activities involving virtual assets or VASPs to the BSP.