Philippines Central Bank Eyes 12-Month Freeze on New Payment Operator Licenses as Crypto Rules Tighten
The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, is considering a 12-month pause on new payment system operator registrations as it moves to tighten oversight of the country's payments industry, including businesses handling crypto-related transactions.
Under a draft circular, the BSP would temporarily suspend the acceptance and processing of applications to register as an Operator of Payment System (OPS). This measure would give the regulator time to conduct a broader review of its payment operator classifications and regulatory framework as digital payment services continue to expand.
Impact on Existing and Pending Applications
The proposed suspension would not only affect companies planning to apply after the rules take effect. Applications submitted before the suspension could continue to be assessed by the BSP, but the central bank would hold off on making a final decision until the 12-month period ends. Existing registered operators, however, would be able to continue their activities.
This means that companies that have already submitted their applications would still be able to proceed with the registration process, but the BSP would not make any decisions on these applications until the 12-month freeze is lifted.
Enhanced Due Diligence and Transaction Monitoring
Crypto businesses would face additional scrutiny under the proposed framework. BSP-supervised institutions providing merchant acquisition services would generally be expected to establish direct relationships with regulated virtual asset service providers rather than allowing crypto businesses to operate through multiple layers of payment facilitators or aggregators.
Those relationships would be subject to enhanced due diligence and closer transaction monitoring. Financial institutions would also be expected to introduce risk-based controls, including limits based on transaction values and settlement arrangements.
The requirements could apply to virtual asset businesses supervised by the BSP, the Philippine Securities and Exchange Commission, or other relevant regulators.
Centralized Database for Merchants
The BSP is also proposing a centralized database for merchants using the country's national QR payment system. The measure could give supervised financial institutions greater visibility into merchants and the transactions passing through payment networks.
This would enable financial institutions to better monitor and manage the risks associated with merchant transactions, and to ensure that merchants are complying with relevant regulations and standards.
Broader Regulatory Push
The proposal follows a broader regulatory push to restrict unauthorized crypto platforms' access to the Philippine financial system. Earlier in 2026, the BSP instructed supervised financial institutions to deal only with appropriately authorized virtual asset businesses and restricted direct retail access to offshore crypto service providers that are not registered with Philippine regulators.
Existing payment arrangements would not escape the new scrutiny. Institutions would be given six months to review affected merchant relationships and another six months to address identified deficiencies.
Implications and Next Steps
The proposed licensing pause and tighter merchant rules suggest the BSP is focusing not only on crypto exchanges themselves but also on the payment infrastructure connecting digital asset businesses with Philippine customers.
The BSP's move is likely aimed at ensuring the stability and security of the country's payment infrastructure, particularly in the context of growing digital payment services and the increasing use of cryptocurrencies.
As the BSP continues to review and refine its regulatory framework, it will be interesting to see how the proposed measures are implemented and how they impact the country's payments industry.
One thing is certain: the BSP's efforts to tighten oversight of the payments industry will have significant implications for crypto businesses and payment operators in the Philippines, and will likely set a precedent for other countries in the region.