Philippines Proposes Payment Registration Freeze and Tighter Crypto Checks

Payment firms in the Philippines could be required to examine merchants, including VASPs, more closely and cut intermediaries out of their payment arrangements under a proposal from the country’s central bank.

The Bangko Sentral ng Pilipinas (BSP) is also seeking a 12-month suspension of new registrations for new operators of payment systems while it reassesses the sector’s classification and licensing rules.

A draft circular recently published by the BSP seeks to ensure institutions can identify the businesses accepting payments and trace where money goes. Arrangements that conceal merchants or beneficiaries, or hinder efforts to detect and investigate fraud and money laundering, would be prohibited.

BSP-supervised institutions providing merchant acquisition services would only be allowed to serve regulated virtual asset firms through direct merchant relationships. These firms could not use intermediaries to receive, process, or settle payments under such arrangements.

Providers would also need enhanced due diligence and monitoring, with transaction and settlement limits reflecting the risks involved. Similar safeguards would cover businesses including gambling operators and money service businesses.

The BSP would continue reviewing applications submitted before the freeze, but would issue no approvals or rejections until it ended. During the pause, businesses may not begin activities requiring payment-system operator registration without BSP authorization.

If adopted, the circular would take effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.