H1: Philippines BSP Proposes 12-Month Payment-Operator Registration Freeze and Tighter VASP Controls
The Bangko Sentral ng Pilipinas is proposing a significant tightening of its payments regulatory perimeter, including rules that directly affect how regulated virtual asset service providers can be handled by supervised financial institutions.
The proposal has two major components:
- a 12-month pause on new Operator of Payment System registrations;
- stricter merchant-acquisition and traceability requirements for higher-risk sectors, including regulated VASPs.
The measure remains a draft.
It should not be described as an already-effective one-year ban.
What would the 12-month OPS pause do?
Under the draft, the BSP would suspend acceptance and processing of new applications to register as an Operator of Payment System for 12 months from the measure’s effectivity.
The central bank says the pause would give it time to conduct a broader review of:
- OPS taxonomy;
- registration categories;
- licensing framework;
- risk-management expectations;
- supervisory design.
The policy is therefore a licensing-framework reset rather than a crypto-specific ban.
What happens to applications already filed?
Applications submitted before the suspension would not simply disappear.
They could continue through evaluation.
However, the BSP would withhold final approval or denial until the suspension ends.
That creates a potentially long regulatory holding period for pending applicants.
What activities would be restricted during the pause?
Entities generally could not begin activities that require OPS registration during the proposed suspension unless separately authorized under existing BSP rules.
This makes the rule economically meaningful even if an entity is still technically “under evaluation.”
Why VASPs are specifically affected
The same draft would tighten merchant-acquisition rules for regulated VASPs.
When BSP-supervised institutions provide merchant-acquisition services to covered crypto businesses, the relationship would generally need to be direct rather than hidden behind multiple intermediary layers.
Regulated VASPs would face measures including:
- enhanced due diligence;
- closer ongoing monitoring;
- transaction limits;
- settlement limits;
- risk-based controls.
The rule covers VASPs requiring authorization from the BSP, the Philippine Securities and Exchange Commission or another competent authority.
Merchant traceability is the core policy objective
The proposal goes beyond crypto.
A central principle is that the institution processing a payment should be able to identify:
- the actual merchant;
- the party ultimately entitled to receive proceeds;
- the transaction path;
- the settlement account;
- intermediary roles.
Where a merchant cannot be identified or a transaction cannot be reliably attributed and reconciled, the supervised institution could be required to reject or suspend the activity.
Why layered payment structures create risk
Multi-layer merchant arrangements can obscure:
- who actually sold the product;
- who received funds;
- which entity performed KYC;
- who is responsible for transaction monitoring;
- whether an unlicensed business is using a regulated intermediary as a payment gateway.
For crypto, those problems become more serious when fiat payment rails connect directly into:
- exchanges;
- OTC platforms;
- wallet services;
- remittance products;
- on/off-ramp providers.
National QR Code Merchant Database
The broader proposal also contemplates a centralized merchant-information database for businesses accepting payments through the national QR-code standard.
The database is intended to improve:
- merchant identity verification;
- fraud detection;
- cross-provider visibility;
- risk classification;
- licensing checks.
Records could include merchant identity, business registration, payment provider, settlement account, ownership and risk status.
Incident-reporting implications
The draft framework also points toward faster reporting of material fraud, scams, cybersecurity events, sanctions issues, illegal merchant activity and unlicensed activity.
That would increase the compliance burden on payment providers dealing with crypto-linked merchants.
What this does not mean
The proposal does not mean:
- the Philippines is banning crypto;
- all VASP registrations are frozen;
- existing regulated VASPs must shut down;
- the 12-month OPS pause is already effective;
- every crypto payment must be blocked.
It is a proposed payment-system licensing and merchant-acquisition control framework.
Why this matters for exchanges and on/off ramps
The operational impact could be most visible in fiat access.
A VASP may remain licensed to provide virtual-asset services but face stricter requirements from banks or payment institutions handling:
- card acquiring;
- QR payments;
- merchant settlement;
- fiat deposits;
- fiat withdrawals.
That can affect onboarding, transaction limits and settlement architecture even without changing the VASP’s core crypto licence.
Effective-date status
The proposal remains open to feedback.
Reporting on the draft says it would take effect after finalization and publication, not immediately upon the draft’s release.
CEXVia therefore assigns: Medium / Regulatory Developing
rather than treating it as an active 12-month moratorium today.
Evidence Status
Confirmed / Draft regulatory proposal
- BSP has proposed a 12-month OPS registration pause.
- Existing applications may continue evaluation but would not receive final approval/denial during the pause.
- Regulated VASPs are included in higher-risk merchant-acquisition controls.
- Enhanced due diligence and monitoring are proposed.
- Transaction/settlement limits may apply.
- Greater merchant traceability is proposed.
- A national QR merchant database is part of the broader policy direction.
Developing
- Final circular text.
- Feedback period outcome.
- Final effectivity date.
- Exemptions.
- Treatment of pending applications.
- Enforcement guidance.
- Exact impact on specific VASPs and payment providers.
Risk Assessment
Medium.
The proposal could materially change licensing timelines and payment access, but it is not yet final.
What to Watch Next
- Final BSP circular.
- Consultation deadline.
- Effective date.
- Exemptions or grandfathering.
- Pending OPS applications.
- Bank/VASP merchant-acquisition changes.
- QR merchant database implementation.
- Transaction-limit guidance.
- Enforcement rules.
- VASP notices about fiat channels.
FAQ
Has the Philippines frozen new payment-operator registrations already?
No. The measure is currently a proposal/draft.
How long would the proposed freeze last?
12 months from effectivity.
Does it freeze all VASP licences?
No. It targets OPS registrations and introduces separate payment-control requirements involving regulated VASPs.
Would existing VASPs have to close?
The proposal does not itself require all existing VASPs to close.
Why are VASPs singled out?
They are treated as higher-risk merchant relationships requiring enhanced controls and traceability.
Could this affect fiat deposits and withdrawals?
Potentially, because payment institutions and merchant acquirers are part of the fiat access layer used by crypto firms.