Bangko Sentral ng Pilipinas (BSP) has kept its moratorium on new Virtual Asset Service Provider (VASP) licenses in place for more than four years: a cautious and deliberate stance toward the rapidly evolving crypto ecosystem.
Observably, digital asset adoption continues to grow across the globe, yet the BSP depicts a regulatory philosophy: innovation must be balanced with stability, consumer protection, and systemic risk management.
The moratorium, first announced in August 2022 through Memorandum No. M-2022-035, remains active as of late 2026.
BSP officials have repeatedly emphasized that the freeze is not a rejection of cryptocurrency innovation but a necessary pause to strengthen supervisory frameworks, monitor existing players, and ensure that the Philippine financial system does not absorb risks it is not yet prepared to manage.
Background: What is a BSP Moratorium?
A moratorium, in regulatory practice, is a formal suspension of new applications, approvals, or issuances within a specific sector.
It is not a ban, nor does it invalidate existing licenses. Instead, it is a temporary pause that allows regulators to reassess risks, strengthen supervisory frameworks, and ensure that the market remains stable while undergoing rapid change.
Across the financial sector, moratoria are used when emerging technologies or business models introduce risks that existing regulations are not yet fully equipped to manage.
The Bangko Sentral ng Pilipinas (BSP) has clear authority to impose moratoria under its charter, Republic Act No. 7653, as amended by RA No. 11211, which grants it supervisory powers over financial institutions and entities performing money service business activities.
The granted authority includes the ability to regulate, restrict, or temporarily halt licensing when systemic risk, consumer protection concerns, or supervisory capacity issues arise.
BSP’s mandate to maintain price stability, financial stability, and a safe payments ecosystem allows it to pause licensing when the growth of a sector, such as virtual assets, outpaces the maturity of its risk controls.
The moratorium on new VASP licenses is therefore a prudential measure, grounded in the BSP’s responsibility to safeguard the financial system while ensuring that innovation does not compromise stability.
Capabilities of a VASP License
A Virtual Asset Service Provider (VASP) is any entity that facilitates the exchange, transfer, safekeeping, or administration of virtual assets, including cryptocurrencies and stablecoins.
Under BSP Circular No. 1108 (2021), VASPs are classified as money service businesses (MSBs), meaning they operate within the same regulatory perimeter as remittance companies, foreign exchange dealers, and payment service providers.
The MSB classification subjects VASPs to stringent anti‑money laundering (AML), counter‑terrorism financing (CTF), cybersecurity, and consumer protection requirements.
A BSP‑issued VASP license authorizes an entity to perform regulated activities:
- exchange of fiat currency to virtual assets and vice versa, enabling users to buy, sell, or convert crypto through compliant channels;
- transfer of virtual assets, including wallet‑to‑wallet transactions, subject to Travel Rule compliance;
- safekeeping or administration of virtual assets, allowing VASPs to operate custodial wallets with strict security and segregation requirements; and,
- facilitation of payments using virtual assets, provided these activities comply with BSP’s payments and settlement regulations.
The license does not grant permission to issue tokens, operate unregistered investment schemes, or provide services outside the scope of Circular No. 1108. VASPs must maintain minimum capital requirements, implement robust cybersecurity controls, and undergo regular BSP examinations.
Because virtual assets carry elevated risks, including volatility, anonymity, cross‑border movement, and susceptibility to fraud: VASPs operate under one of the most stringent supervisory regimes in the Philippine financial sector.
Risk‑Based Regulatory Approach over VASPs
BSP’s supervision over financial institutions is risk‑based, meaning that entities with higher inherent risks, such as VASPs, are subject to more intensive oversight.
What are the inherent risks associated with VASPs?
Virtual assets are inherently borderless, anonymous, and fast‑moving. These characteristics make them attractive for illicit activities, including money laundering, terrorism financing, ransomware payments, and cross‑border fraud.
The Financial Action Task Force (FATF) has repeatedly warned that VASPs are among the highest‑risk financial intermediaries globally.
Crypto markets are also highly volatile, with price swings that can affect consumer protection, liquidity, and solvency. The BSP must ensure that VASPs have adequate risk management frameworks to protect users from market instability.
Moreover, technological complexity introduces operational risks. VASPs rely on blockchain infrastructure, smart contracts, and digital wallets, all of which can be vulnerable to hacking, system failures, and cyberattacks.
The central bank requires VASPs to maintain strong cybersecurity controls, incident reporting mechanisms, and business continuity plans.
Furthermore, global regulatory developments are evolving rapidly, so the BSP must ensure that local VASPs comply with international standards, including FATF’s Travel Rule, which requires VASPs to collect and transmit customer information during transfers.
These factors justify the BSP’s decision to maintain high supervision over VASPs and keep the moratorium in place until the regulatory environment stabilizes.
Not Just Philippines, Regulators Worldwide are Tightening Crypto Regulation
Across the world, central banks and financial regulators are tightening rules for cryptocurrency providers.
In the United States, the Securities and Exchange Commission (SEC) has filed enforcement actions against major exchanges, citing violations of securities laws. The Markets in Crypto‑Assets (MiCA) regulation in Europe also imposes strict licensing, capital, and disclosure requirements.
Singapore, through the Monetary Authority of Singapore (MAS), has restricted retail access to crypto trading and imposed stringent operational requirements on VASPs.
International developments depict a shared recognition that crypto markets pose significant risks to financial stability, consumer protection, and market integrity.
Hence, BSP’s moratorium is consistent with international best practices and demonstrates the regulator’s commitment to safeguarding the Philippine financial system.
Future of VASP Licensing in the Philippines
As of publishing date, the BSP has not announced a timeline for lifting the moratorium. However, it may be considered once supervisory capacity is strengthened, and regulatory frameworks are updated.
BSP may also wait for global regulatory developments to stabilize, particularly in the United States and Europe.
Another critical factor is if existing licensed VASPs in the country demonstrate, and continuously exhibit, strong compliance with AML/CTF, cybersecurity, and consumer protection requirements.
The future of VASP licensing in the Philippines will depend on the regulator’s assessment of market conditions, supervisory capacity, and global developments.
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