Philippines central bank tightens crypto payment rules

TLDR

The Bangko Sentral ng Pilipinas (BSP) is proposing a 12?month freeze on new payment operator licenses and tighter rules for crypto-related merchant payments.

1. BSP plans to pause new Operator of Payment System (OPS) registrations and review its payment and licensing framework, but existing operators and crypto trading are not being banned.
2. For crypto payments, banks and payment firms would only be allowed to deal directly with regulated virtual asset service providers (VASPs), under stricter due diligence, limits, and monitoring.
3. The draft is still out for comment; the key signals will be the final circular, how strictly offshore platforms are cut off from peso rails, and how local wallets and exchanges adapt.

Deep Dive

1. What BSP Is Proposing

According to a draft circular reported by several outlets, including a detailed proposed rules summary, BSP wants a 12?month freeze on new registrations for Operators of Payment Systems (OPS). These are firms that move money for customers, such as e?wallets and payment gateways.

During the freeze, BSP would not accept or process new OPS applications. Applications submitted before the pause could still be reviewed but would not be approved or denied until the period ends, and entities cannot start OPS?regulated activities without specific BSP authorization.

The goal is a holistic review of payment taxonomy and licensing. If finalized, the circular would take effect 15 days after publication. For now, it remains a proposal open to industry feedback, and existing licensed operators can continue working under current rules.

2. Impact On Crypto Payments

The crypto angle is about how regulated institutions connect to VASPs, not about banning crypto outright. BSP?supervised banks and payment providers offering merchant acquisition services would be required to:

1. Work only with VASPs that are licensed or registered with BSP, the Philippine SEC, or another recognized authority.
2. Use direct merchant arrangements, removing layered third?party payment facilitators between banks and crypto firms.
3. Apply enhanced due diligence, tighter transaction and settlement limits, and stronger monitoring to these relationships.

Unregistered or offshore platforms would likely lose easy access to peso payment rails, making it harder for them to offer pay with crypto or seamless local cash?in/cash?out. For users, this means more friction around merchant crypto payments via local wallets, but it does not prevent peer?to?peer transfers or holding tokens on exchanges that do not rely on Philippine OPS licenses.

3. What To Watch Next

The key near?term signal is whether BSP finalizes the draft largely as written or softens parts after consultation. Once published, there would be a short lead time, then the 12?month freeze and new controls begin.

Crypto firms and payment providers will need to restructure any layered arrangements and secure direct acquiring relationships with BSP?supervised institutions to keep access to local payment channels. How aggressively banks enforce limits and monitoring will determine whether crypto merchant payments stay convenient or become niche.

Regionally, this fits a broader pattern of tighter oversight of payment rails around crypto. For Philippine users and businesses, watching BSP and SEC announcements, as well as how major local wallets and exchanges communicate their compliance plans, will be critical.

Conclusion

BSP is not shutting the door on crypto, but it is trying to narrow and better control the channels where digital assets touch the formal peso payment system. In practice, that could slow new payment and crypto operators from entering the market and push activity toward licensed, directly supervised VASPs. The eventual impact on everyday crypto payments will depend on how the final rules balance risk control with maintaining competitive, accessible payment options.