BSP: No new permits for virtual asset service firms until 2025

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Metro Manila (CNN Philippines, August 12) — The Bangko Sentral ng Pilipinas will not be accepting new virtual asset service provider (VASP) license applications for three years beginning September.

In a statement on Friday, the BSP said this "modified approach" to the issuance of permits to VASPs hopes to "maintain the integrity and stability of the financial system and strengthen consumer confidence in the digital ecosystem."

During the three-year period, the central bank will only grant new VASP licenses to existing BSP supervised financial institutions (BSFIs) with strong risk management systems.

Only applications received by the BSP from non-BSFIs who passed the second stage of the licensing process on or before Aug. 31 will be processed and assessed for completeness and sufficiency of documentation as required by the next stage.

Applications with incomplete requirements as of end-August will be returned and considered closed, the BSP added.

"The Bangko Sentral will 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," the central bank said.

Infrawatch PH convenor Terry Ridon told CNN Philippines the BSP's move "effectively precludes" Binance and other foreign crypto exchanges from signing up as VASPs in the country in the next three years.

"The BSP should therefore exercise its regulatory powers further and warn the public not to deal with unlicensed and unregistered crypto exchanges. More importantly, it should order local remittance firms to stop dealing with unlicensed crypto exchanges to deter further money outflows in the future," said Ridon, a lawyer and former member of Congress.

He also urged the BSP to prevent the "backdoor acquisition" of current VASPs by other entities, so as not to defeat the purpose of the three-year moratorium.

Earlier this month, the Securities and Exchange Commission told Infrawatch that Binance is not a registered corporation nor partnership. The SEC's letter to the think tank also cautions the public against investing in the cryptocurrency exchange. 

Binance said in June that it is seeking a VASP license in the country and its chief executive officer (CEO) Changpeng Zhao has met with Philippine officials.

CNN Philippines has sought comment from Binance given the recent development.