BSP proposes 12-month freeze on new Philippine payment operator licenses

The Bangko Sentral ng Pilipinas proposed a 12-month suspension on new payment system operator applications on September 7, 2026, alongside tighter due-diligence requirements for banks and merchant acquirers serving virtual asset businesses.

The proposed measures form part of a broader effort to strengthen controls around merchant payments, improve transaction traceability and address risks associated with fraud, money laundering and other illicit financial activity.

The draft circular is currently subject to public feedback and has not yet become a final rule. If adopted, it would take effect 15 days after publication.

BSP proposes 12-month halt on new payment operators

At the center of the proposal is a temporary suspension of applications for new operators of payment systems, or OPS.

The BSP said the suspension would allow it to conduct what it described as a “holistic review” of the existing OPS taxonomy and licensing framework, including associated risk-management and regulatory considerations.

Under the draft, applications filed before the suspension would not simply be discarded. They could continue to undergo evaluation, but the BSP would not issue an approval or denial while the 12-month pause remained in force.

Companies would also be prohibited from beginning activities that require OPS registration unless they received authorization from the central bank.

The proposal comes as the Philippine payments market continues to expand and become increasingly interconnected with digital platforms, financial technology companies and alternative financial services.

The BSP has previously emphasized that effective payment systems are important for efficient fund transfers, lower transaction costs and overall financial stability.

For the crypto sector, the development adds another layer to Philippines VASP regulation, particularly for businesses whose operations depend on payment intermediaries to move funds between customers, merchants and digital-asset platforms.

Crypto-linked merchants face tougher scrutiny

The most important implications for crypto businesses are found in the proposed merchant-acquiring requirements.

Under the draft, BSP-supervised institutions providing merchant-acquisition services would be required to establish direct merchant arrangements with regulated virtual asset service providers rather than relying on arrangements that make it difficult to identify the ultimate merchant or trace transactions.

Those relationships would face enhanced due diligence, continuous monitoring and risk-based controls. The proposed framework would also allow transaction and settlement limits to be imposed according to the risks associated with the relationship.

The BSP has already told supervised financial institutions to apply appropriate due diligence when dealing with VASPs and to use enhanced due diligence where necessary under their anti-money-laundering and counter-terrorist-financing programs.

That existing approach provides important context for the latest proposal. Rather than treating crypto firms as ordinary merchants, regulators are moving toward a framework in which higher-risk sectors receive additional scrutiny.

The proposed rules place VASPs in the same enhanced-control category as certain gambling and gaming businesses, adult-oriented businesses and money service businesses.

That means Philippines VASP regulation is increasingly being integrated into the country’s wider financial-integrity framework rather than being treated as an isolated crypto policy.

Traceability becomes a central regulatory priority

A major theme running through the proposal is the BSP’s emphasis on knowing exactly where money comes from, where it goes and which merchant ultimately receives it.

The draft would impose restrictions on merchant arrangements involving intermediaries where institutions cannot adequately identify the parties involved, trace funds or exercise effective oversight. Illegal activities and businesses operating without the necessary authorization would also be excluded from permitted merchant relationships.

For transactions involving multiple merchants through shared accounts, platforms or QR-enabled channels, the proposal would require mechanisms allowing individual transactions to be tied to unique merchant identifiers. Those transactions would also need to be separately monitored, investigated and reconciled.

This approach could have practical consequences for crypto businesses using payment infrastructure to support deposits, withdrawals, merchant payments or other fiat-to-crypto and crypto-to-fiat services.

The BSP already maintains a public directory that distinguishes regulated financial institutions, including VASPs and operators of payment systems.

The regulator’s active VASP oversight has also expanded. In 2026, the BSP issued guidance on coin and token listing, stressing the need for robust due diligence and accreditation processes before virtual assets are offered to customers.

Together, these measures point toward a more structured approach to Philippines VASP regulation, with licensing, transaction monitoring, consumer protection and financial-integrity controls increasingly operating as interconnected requirements.

Draft rules could reshape crypto-payment relationships

For the Philippine crypto industry, the proposal is significant because it targets the infrastructure surrounding virtual assets as much as the assets themselves.

A VASP may be properly authorized yet still depend on banks, payment processors or merchant acquirers to provide access to the traditional financial system. Tighter requirements at those points of connection could increase compliance costs while forcing businesses to strengthen transaction-monitoring and customer-screening systems.

The policy could also make regulatory status more important for crypto companies seeking relationships with financial institutions.

The BSP’s own public records show that regulated VASPs form part of the country’s supervised financial ecosystem, while its recent guidance has emphasized caution and enhanced due diligence when supervised institutions deal with virtual-asset businesses.

For now, however, the proposed framework remains a draft. The central bank is accepting feedback before deciding whether to finalize the measures.

If adopted, the rules would represent another substantial step in Philippines VASP regulation, shifting attention beyond licensing alone toward how crypto businesses interact with the country’s banking and payment infrastructure.

The message from the BSP is increasingly clear: access to the Philippine payments system will come with stronger expectations around transparency, traceability, risk management and regulatory compliance.