Philippines Central Bank Proposes One-Year Freeze on Payment Operator Registrations

The Bangko Sentral ng Pilipinas (BSP) has proposed a 12-month freeze on new payment-system operator registrations. The central bank will also impose stricter controls on payment arrangements involving virtual asset service providers, or VASPs.

Under a draft circular, the regulator will suspend the processing of new applications to conduct a holistic review of its licensing framework and taxonomy. While previously submitted applications will continue to be evaluated, the BSP will not issue any approvals or denials until the pause concludes.

Entities are barred from initiating activities that require payment operator registration unless explicitly authorized by the regulator. This temporary halt aims to reassess how payment systems are categorized and supervised across the broader financial ecosystem.

The proposal mandates that BSP-supervised institutions providing merchant acquisition services must manage regulated VASPs through direct merchant arrangements. These relationships will face enhanced due diligence, continuous monitoring, and strict transaction and settlement limits.

The new rules apply to virtual asset firms that are licensed or authorized by the BSP, the Philippine Securities and Exchange Commission, or other relevant authorities. Notably, the draft categorizes VASPs alongside gambling businesses, gaming providers, adult-oriented enterprises, and money service businesses.

This regulatory shift signals a cautious approach to crypto integration within traditional payment rails, directly impacting fintech companies and crypto exchanges operating in the region. By grouping virtual asset firms with high-risk industries, the central bank is demanding that financial intermediaries treat crypto-related merchant acquisitions with heightened scrutiny and robust risk-based controls. Investors and compliance officers should expect increased operational costs for crypto-linked payment processing.

The draft circular will take effect 15 days after publication if finalized in its current form. The BSP is currently accepting feedback from industry stakeholders before formally adopting the new framework, leaving market participants a narrow window to influence the final rules.