Key facts
- The BSP has mandated that all licensed Virtual Asset Service Providers (VASPs) implement strict due diligence and accreditation processes for listing digital assets.
- The new guidelines explicitly prohibit anonymity-enhancing cryptocurrencies, commonly known as privacy coins.
- VASPs must continuously monitor listed assets and set thresholds for suspension or delisting based on factors like liquidity loss, issuer insolvency, or scams.
- The Philippines' crypto regulatory landscape involves oversight from both the Securities and Exchange Commission (SEC) and the BSP.
- Binance is attempting to re-enter the Philippine market through a local partner, BlockShoals Technologies Inc., but faces regulatory hurdles.
- BlockShoals must integrate with a licensed domestic VASP within 90 days to proceed with user onboarding via Binance infrastructure.
The Philippines' financial authorities are intensifying their regulation of the cryptocurrency sector. The Bangko Sentral ng Pilipinas (BSP) has introduced new directives requiring licensed Virtual Asset Service Providers (VASPs) to establish robust due diligence and accreditation processes before listing any virtual asset. These rules are designed to promote financial stability and protect consumers by ensuring digital asset services are offered in a safe and sound manner.
Crucially, the BSP's new guidelines explicitly ban anonymity-enhancing cryptocurrencies, often referred to as privacy coins, from being listed or supported by VASPs. This effectively removes assets like Monero and Zcash from compliant exchanges within the country. The memorandum also mandates that VASPs continuously monitor their listed assets and implement thresholds that would trigger suspensions or delistings, citing reasons such as loss of liquidity, issuer insolvency, involvement in scandals, de-pegging, or misleading disclosures.
Alden Yburan, head of crypto at GCash, described the stricter listing standards as "long overdue" and a "minimum bar" for responsible platforms, though he expressed mixed feelings about the privacy coin ban, acknowledging their legitimate use cases while noting the Philippines' remittance-heavy economy. The move aligns with a broader trend of tightening crypto regulations in the Philippines, which began with the SEC's licensing framework and the blocking of offshore exchanges.
The regulatory framework involves a dual-authority system, with the SEC overseeing crypto-asset service providers (CASPs) from a securities perspective and the BSP licensing VASPs for payment and transaction services. The SEC has previously mandated local registration, substantial paid-up capital, and domestic data storage for CASPs, and has also restricted access to several offshore platforms.
In parallel, the global cryptocurrency exchange Binance is attempting to re-enter the Philippine market through its local partner, BlockShoals Technologies Inc. However, neither entity currently holds a VASP license from the BSP. The SEC has clarified that BlockShoals' participation in a regulatory sandbox does not substitute for central bank licensing and requires the company to integrate with a licensed domestic VASP within 90 days before onboarding any users via Binance infrastructure.