Philippines central bank freezes new crypto licenses

TLDR

The Bangko Sentral ng Pilipinas has proposed a 12 month freeze on new payment system operator licenses, tightening oversight of crypto payments but not banning existing trading or licensed exchanges.

1. BSP draft rules would pause new payment system operator registrations for 12 months while the bank reviews its licensing and risk framework.
2. Crypto impact is mainly on payment rails, with stricter rules for how banks and processors work with regulated virtual asset service providers.
3. The measures are still a proposal; if approved, they would start 15 days after publication, so businesses have a short window to adapt once finalized.

Deep Dive

1. What BSP Has Actually Proposed

According to a draft circular, the Bangko Sentral ng Pilipinas (BSP) has proposed a 12 month freeze on new registrations for operators of payment systems, known as OPS, to allow a holistic review of its taxonomy and licensing framework. This would see BSP stop accepting and processing new OPS applications for the duration of the pause, while continuing to review applications submitted before the suspension without approving or denying them.

Entities would also be prohibited from starting activities that require OPS registration unless specifically authorized by BSP. If the circular is finalized, it would take effect 15 days after publication, and the freeze would then run for the stated 12 months. These details are laid out in reporting on the proposed freeze and associated VASPs controls.

2. How This Hits Crypto Businesses And Users

The move targets payment operators rather than crypto trading itself. The draft would require BSP supervised institutions that acquire merchants to work directly with regulated virtual asset service providers, with enhanced due diligence, monitoring, and transaction and settlement limits on those relationships. VASPs licensed or registered by BSP, the Philippine SEC, or another authority are explicitly covered and grouped with higher risk sectors such as gambling and money service businesses for control purposes, not as identical activities.

For crypto exchanges and wallets, the main impact is at the interface with pesos payment rails. New entrants that depend on local payment operators may face delays getting licensed, while existing regulated firms could see tighter onboarding and limits but are not automatically shut down. Retail users can still buy, hold, and transfer crypto through existing regulated channels, though some payment routes may become more constrained over time as banks implement the new rules described in analysis of the 12 month OPS freeze.

3. What To Watch Next

The circular is currently an exposure draft, and BSP is soliciting written feedback before it is finalized, so details could still change. Once published in final form, the rules would come into force after 15 days, and the 12 month pause would begin on the timetable set in that document.

Key signals to monitor include: whether BSP narrows or broadens the scope of OPS covered, how strictly banks apply transaction and settlement limits to VASP related flows, and whether offshore or unlicensed platforms lose access to local payment channels. Regionally, this fits a wider pattern of regulators tightening oversight around crypto payment gateways rather than banning digital assets outright, suggesting more compliance heavy growth paths for Philippine facing crypto businesses.

Conclusion

The Philippines central bank is moving toward a temporary licensing freeze and stronger controls at the junction between crypto firms and domestic payment systems, but it is not shutting down existing regulated crypto trading. If the proposal is finalized, the main effects will be slower approval for new payment operators and stricter, more direct relationships between banks and licensed VASPs, making compliance and risk management a central differentiator for crypto businesses serving the Philippine market.