Philippines Central Bank Proposes Payment Operator Registration Freeze, Tighter VASP Oversight

The Bangko Sentral ng Pilipinas (BSP), the Philippines' central bank, has put forth a proposal to temporarily halt new registrations for payment-system operators. This 12-month freeze is intended to facilitate a comprehensive review of the existing regulatory framework and licensing structure for these entities.

In parallel, the BSP plans to implement stricter oversight for payment arrangements involving virtual asset service providers (VASPs). Under the draft circular, BSP-supervised institutions offering merchant acquisition services will be required to engage in direct merchant arrangements with regulated VASPs. These relationships will be subject to enhanced due diligence, transaction and settlement limits, and other risk-mitigation measures.

The proposed measures also extend to virtual asset firms licensed or authorized by the Philippine Securities and Exchange Commission or other relevant authorities. The draft circular is currently open for public comment and is slated to take effect 15 days after its final publication.

This move by the BSP comes amid increasing scrutiny of virtual assets and their integration into the financial system, aiming to balance innovation with robust risk management.