BSP Bans Privacy Coins, Issues Token Listing, Delisting Guidelines for VASPs

The Bangko Sentral ng Pilipinas (BSP) has issued new guidelines requiring all Virtual Asset Service Providers (VASPs) to establish rigorous due diligence and accreditation processes for listing and trading virtual assets on their platforms.

The regulatory expectations, detailed in Memorandum No. M-2026-023, aim to promote financial stability and protect consumer welfare by ensuring virtual asset services operate in a safe and sound manner. Signed by BSP Deputy Governor Lyn I. Javier on June 5, 2026, the central bank also explicitly prohibited VASPs from listing or supporting anonymity-enhancing or privacy virtual assets

The Six Pillars of Due Diligence

According to the memorandum, the guidance for evaluating virtual assets is organized into six regulatory pillars^:

• Issuer’s Background: VASPs must evaluate the credibility and legitimacy of the issuer by reviewing registered addresses, articles of incorporation, ownership structures, ultimate beneficial owners, audited financial statements, and fitness and propriety checks of directors and operators.
• Market Capitalization and Maturity: Operators are required to assess market resilience using metrics such as historical data, 30-day average trading volumes, current and planned market capitalization, token holder counts, and support from other global exchanges.
• Use Cases: The guidelines require evaluation of the token’s objective, target users, whitepapers, underlying blockchains, risks, and specific category, such as whether it operates as a stablecoin, utility token, or governance token.
• Transparency, Traceability, and Security: This pillar focuses on verifying underlying technological infrastructure, consensus algorithms, independent smart contract audits, and the asset’s traceability via blockchain analytics companies.
• Redemption, Liquidity, and Reserves: For asset-backed or fiat-backed virtual assets, VASPs must verify the composition of reserve assets, stabilization mechanisms, withdrawal rights, and the availability of liquidity providers.
• Legal and Compliance: Evaluation includes assessing anti-money laundering (AML) compliance, terms and conditions, dispute resolution procedures, and the regulatory status of the virtual asset in other jurisdictions.

Framework Flexibility and Ongoing Monitoring

The BSP noted that the provided criteria are not exhaustive, allowing VASPs to develop internal token listing frameworks that incorporate additional factors alongside the central bank’s guidelines^{. However, the memorandum mandates that VASPs conduct continuous monitoring of listed virtual assets. Operators must define specific thresholds for deviations from these standards to serve as automated triggers for asset delisting.}

Mandatory Suspension and Delisting Triggers

The memorandum directs VASPs to either suspend or immediately delist a specific token or coin to protect customers from asset losses under four defined categories of adverse circumstances^:

• Consumer Protection: Triggers include misleading disclosures by the issuer.
• Adverse Market and Economic Developments: Triggers include a loss of liquidity support, breach of capitalization thresholds, insolvency of the issuer, or involvement in a scam or regulatory red flag.
• Legal and Regulatory Non-Compliance: This includes stablecoin de-pegging, inadequate reserves, failure to comply with disclosure rules, regulatory environment changes making the token illegal, or a direct delisting order from regulatory agencies.
• Cybersecurity Concerns: Action is required if there is a material threat to the asset’s cybersecurity infrastructure or if the token suffers a widespread security breach, regardless of whether current customers are affected.

In a related development regarding central bank oversight, the BSP previously confirmed that neither BlockShoals Technologies Inc. nor its global technology partner, Binance, holds an active Certificate of Authority to operate as a VASP in the Philippines.

The central bank clarified that participation in the Securities and Exchange Commission (SEC) regulatory sandbox framework does not exempt an entity from separate central bank licensing requirements to facilitate transaction rails. While the BSP and SEC maintain independent regulatory frameworks, the central bank confirmed that both agencies are currently coordinating regarding the BlockShoals and Binance operational plan.

Blockshoals has since announced that it already has selected a local VASP partner.

This article is published on BitPinas: BSP Bans Privacy Coins, Issues Token Listing, Delisting Guidelines for VASPs

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