BSP halts new licenses to virtual asset players
The Bangko Sentral ng Pilipinas (BSP) has issued a three-year moratorium on the grant of licenses to new virtual asset service providers (VASPs) amid varied risks that may undermine financial stability.
BSP Governor Felipe Medalla said the Monetary Board approved a modified approach to the grant of VASP license to maintain the integrity and stability of the financial system and strengthen consumer confidence in the digital ecosystem.
“Recent market developments have necessitated the adoption of a modified VASP licensing approach, which strategically shifts the focus to assessing the existing Bangko Sentral-registered VASPs’ overall performance and risk management systems, their impact on financial services and financial inclusion agenda, and their contribution toward the achievement of the Digital Payments Transformation Roadmap objectives,” Medalla said.
VASPs refer to entities that offer services or engage in activities that provide facility for the transfer or exchange of virtual assets – any type of digital unit that can be digitally traded or transferred, and can be used for payment or investment purposes.
With the modified approach approved by the BSP on Aug. 4 through Resolution 1141, the regular application window for new VASP licenses shall be closed for three years starting Sept. 1, subject to reassessment based on market developments.
Applications that have completed or passed Stage 2 of the licensing process on or before Aug. 31 will still be processed and assessed for completeness and sufficiency of documentation or information submitted, as well as compliance with the licensing criteria to operate as a VASP based on Stage 3 requirements.
On the other hand, applications with incomplete requirements will be returned and tagged as closed.
Meanwhile, Medalla said existing BSP-supervised financial institutions (BSFls) that wish to expand operations
by offering VASP services, including non-custodial VASPs that wish to offer safekeeping and custodial services, could still apply for a VASP license provided that they have a Supervisory Assessment Framework (SAFr) composite rating of at least stable.
According to Medalla, the BSP would continue to intensify its surveillance of the developments in the digital space, enhance existing monitoring capabilities over the digital threat landscape, and expand consumer awareness campaigns on the risks of holding virtual assets.