The Bangko Sentral ng Pilipinas proposed a 12-month suspension of new payment-system operator registrations while introducing tighter controls for payment arrangements involving virtual asset service providers.
Summary
- BSP proposed pausing new payment-system operator registrations for twelve months while reviewing its licensing framework.
- Applications submitted before suspension could proceed through review but receive no decision meanwhile from regulators.
- Payment arrangements involving regulated virtual asset firms would require direct merchant relationships and enhanced monitoring.
- Covered institutions could impose transaction, settlement and exposure limits according to their assessed risks internally.
- Final rules would become effective fifteen days after publication if the proposed circular receives approval.
Under its proposed circular, the BSP would temporarily stop accepting and processing applications to register as an operator of a payment system, or OPS.
The central bank said the pause would support a “holistic review” of its OPS taxonomy, registration process and licensing framework. The proposal remains an exposure draft and does not impose an immediate suspension.
Applications submitted before the pause begins could continue through the BSP’s evaluation process. However, the regulator would neither approve nor deny those applications until the 12-month period ends.
Applicants would also be prohibited from starting activities that require OPS registration during the freeze unless the BSP provides separate authorization. Existing registered operators are not ordered to stop operating under the draft.
The BSP already maintains an OPS registration system under the National Payment Systems Act. Its official guidance says registration creates a baseline inventory that the regulator uses to assess payment-system activities, participants and systemic risks.
Crypto payment arrangements face direct-merchant rules
The proposed Philippines payment rules would require BSP-supervised institutions providing merchant acquisition services to deal directly with regulated VASPs rather than place them behind layered payment facilitators.
A direct merchant arrangement means the acquiring institution holds the contractual relationship with the merchant. This structure gives the institution direct access to information needed for onboarding, transaction monitoring and settlement controls.
The requirement would cover virtual asset businesses that must hold a license, registration or authorization from the BSP, the Philippine Securities and Exchange Commission or another relevant authority.
VASPs appear in the draft alongside casinos, gaming operators, adult-oriented businesses and money-service businesses. The grouping reflects the regulator’s assessment that these sectors need stronger controls. It does not mean the BSP considers their underlying activities identical.
Institutions dealing with covered firms would need enhanced due diligence, closer transaction monitoring and risk-based limits. Those limits could apply to transaction values, settlement schedules and total exposure.
The proposal builds on earlier BSP measures. As previously reported, the central bank tightened token listing and monitoring requirements for licensed VASPs in June. Those rules require continuing reviews and defined suspension or delisting triggers.
Existing layered arrangements would face review
BSP-supervised institutions would need to identify existing payment arrangements involving covered merchants. Layered structures would face an assessment to determine whether they comply with the proposed direct-merchant requirement.
Institutions would reportedly receive six months to complete that review and another six months to address identified weaknesses. Required changes could include restructuring contracts, imposing limits or ending arrangements that exceed the institution’s risk tolerance.
The draft would also strengthen merchant identification. The BSP plans a centralized National QR Code Merchant Database intended to help institutions identify fraudulent, prohibited or problematic merchants across payment networks.
These requirements could affect banks, electronic-money issuers, merchant acquirers and payment facilitators connecting virtual asset platforms to local payment channels. The operational burden will depend on how the BSP defines covered arrangements in the final circular.
The licensing distinction has already affected international crypto companies. Crypto.news previously reported that Binance and BlockShoals lacked BSP-issued VASP licenses, despite participating in the SEC’s StratBox sandbox program.
The SEC later approved BlockShoals to begin sandbox testing, but that sandbox approval preserved separate BSP licensing requirements. The proposed payment rules would add another compliance layer for institutions serving similar arrangements.
BSP will review feedback before finalizing the rules
The BSP is accepting written comments through its policy exposure draft portal. The regulator says stakeholders should submit feedback to the policy officers identified alongside each draft.
The central bank may revise the suspension, implementation periods or covered arrangements after reviewing industry responses. No registration freeze begins solely because the draft has been published for consultation.
If adopted in its current form, the circular would take effect 15 days after publication in the Official Gazette or a newspaper of general circulation. The 12-month pause would begin according to the effective provisions of the final document.
Payment companies should therefore monitor the final text, particularly its treatment of pending applications and existing relationships with VASPs. Regulated crypto firms may also need to establish direct arrangements with acquiring institutions before continuing access to some Philippine payment channels.
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