Philippines central bank proposes 12-month freeze on new payment operator registrations
A draft circular would also tighten merchant-acquiring rules for regulated VASPs with EDD and transaction limits.
The Bangko Sentral ng Pilipinas has proposed a 12-month pause on new operator of payment systems registrations while it conducts a “holistic review” of its taxonomy and licensing framework. The same draft circular would push stricter, direct-merchant controls and limits onto payment arrangements involving regulated virtual asset service providers.
BSP Proposes 12-Month Freeze on New Payment-System Operator Registrations
The Bangko Sentral ng Pilipinas (BSP) has put out a draft circular proposing to freeze new registrations for operators of payment systems (OPS) for 12 months, explicitly tying the pause to a “holistic review” of how it classifies payment activities and how it licenses them.
Mechanically, the proposal is not just a slowdown. It would suspend the BSP’s acceptance and processing of OPS registration applications during the 12-month window, and it would also bar entities from starting activities that require OPS registration unless the BSP authorizes them otherwise.
The part that creates the most operational uncertainty is how the BSP proposes to treat applications already in the pipeline. Applications submitted before the suspension could continue to be evaluated, but the BSP would not approve or deny any until the pause ends. That leaves would-be operators in a regulatory holding pattern, and it also leaves their prospective partners without a clear timeline for when a new payment rail or service can legally go live.
If finalized, the draft circular would take effect 15 days after publication. The BSP was accepting feedback at the time the proposal was published, and the central bank did not provide additional information in response to a request for comment before publication, so the final scope and any carve-outs are still unresolved.
VASP Payment Arrangements Get Direct-Merchant Treatment, EDD, and Limits
Alongside the OPS pause, the draft circular tightens the compliance posture around payment arrangements involving virtual asset service providers (VASPs), focusing on the institutions that provide merchant acquisition services. Under the proposal, BSP-supervised institutions offering merchant acquisition services would be required to handle regulated VASPs through direct merchant arrangements, rather than looser, indirect structures.
Those direct-merchant relationships would come with enhanced due diligence (EDD) and enhanced monitoring, plus transaction and settlement limits and other risk-based controls. The draft, as described, does not specify the numeric thresholds for those limits, which matters because the practical impact on fiat throughput will depend on where the BSP sets caps and how it expects acquirers to apply them across channels.
Scope is also spelled out in a way that matters for market structure. The requirement covers virtual asset firms that must be licensed, registered, or authorized by the BSP, the Philippine Securities and Exchange Commission, or another authority. That framing pulls the rule toward regulated on-ramps and off-ramps, not informal crypto activity, and it signals that the BSP is targeting the payment perimeter where supervised institutions can be compelled to re-paper relationships and enforce controls.
The risk framing is not subtle. VASPs are listed alongside gambling businesses, gaming providers, adult-oriented businesses, and money service businesses in the draft circular. In practice, that grouping tends to translate into higher-friction onboarding, more intensive monitoring, and tighter limits, even when the underlying entity is licensed.
The next procedural milestones are straightforward but market-relevant. The circular is not yet in force, and the effective date would only start running if and when the BSP finalizes it and publishes it, which would then trigger the 15-day countdown.
What traders and operators will need to track is whether the final text keeps the same stance on authorizations during the OPS pause, since the draft bars starting OPS-requiring activities unless the BSP authorizes them otherwise. The other key unknown is where the BSP lands on transaction and settlement limits for VASP-linked direct merchant arrangements, and whether those limits are uniform or vary by payment channel.
A separate implementation question sits with the private sector. If the BSP finalizes the direct-merchant requirement, BSP-supervised acquirers and local payment processors will need to convert existing VASP payment relationships into direct merchant arrangements, and the speed and strictness of that re-papering will determine how quickly any friction shows up in deposits, withdrawals, and settlement timelines.
My Read: This Is a Fiat-Rails Bottleneck Risk, Not a Blanket Crypto Ban
The filing is being read as a crypto crackdown, and that misses what the draft circular is actually doing. The threshold that matters is not whether VASPs can operate in the Philippines, but whether new payment rails can get licensed and launched while the BSP runs its “holistic review”, because a 12-month pause that withholds approvals and denials even for already-submitted applications is how you create a quiet bottleneck without ever saying the word “ban.”
The real test is whether the final circular preserves meaningful exemptions or authorizations that let new OPS-requiring activities start during the pause, and whether the transaction and settlement limits on direct-merchant VASP arrangements are set at levels that still allow normal on-ramp and off-ramp volume. If those two levers stay tight at the same time, the setup starts to look structural rather than narrative-driven, because it constrains fiat throughput even when the underlying crypto firms are regulated.
