The BSP said in Circulat No. 1108 (issued Jan. 25), that VASPs will now require a licence, Known locally as a “certificate of authority,” in order to operate.
VASPs will also be required to have a minimum capital requirement of 50 million Philippine pesos (approx. $1 million) if they provide custody services, or 10 million pesos ($208,000) if not.
The requirements also entail that VASPs align with the regulator’s existing rules for financial service providers, such as liquidity and operational risk requirements, along with monitoring IT risk and implementing internal controls relating to consumer protection and anti-money laundering.
The central bank issued a statement saying it supports “an environment that encourages financial innovation while safeguarding the integrity and stability of the financial system.”
While virtual assets “have the potential to revolutionize the delivery of financial services,” any benefits should be considered alongside any risks of use in money laundering, it said.
The requirements also mean that VASP’s are responsible for conducting CDD and Crypto transactions will now have the same obligations as cross border transfers. Suspicious transactions must also now be reported, with new guidelines on EDD and payout restrictions, the bank said.
The guidelines are based on international standards for regulators issued recently by the Financial Action Task Force.