- The Central Bank of the Philippines will not accept applications from virtual asset service providers for a period of three years.
- The bank claims that institutions pose a variety of risks to financial stability.
- Previously existing service providers could still expand operations and continue to operate based on regulatory compliance.
Bangko Sentral, the central bank of the Philippines, will close the door to all Virtual Asset Service Providers (VASPs) seeking a license to operate in the country starting September 1, per Advertising from the bank.
VASPs that have submitted an application and completed the second phase of approval before August 31 will still be considered for approval. In addition, a pre-approved VASP will be able to continue operating and submit for renewal as needed. However, if the applications do not meet the final stage of Central Bank requirements by August 31, the approval window for the aforementioned three-year period will be closed.
Meanwhile, if VASP is looking to expand its operations, including non-custodial services, it will need Bangko Sentral’s Composite Rating of “Stable” for the Philippines Supervisory Asset Framework and currently listed as a supervised financial institution.
“Bangko Sentral aims to strike a balance between encouraging innovation in the financial sector and ensuring that risks associated with it remain within manageable levels,” the central bank said in the statement.
In fact, financial regulators have become increasingly cautious since market infection It has engulfed the broader cryptocurrency ecosystem. It also faced financial institutions liquidity crises And the rescue operations became a regular conversation, Some nation states Measures have been taken in an effort to maintain consumer confidence.
Despite regulatory pressures, Bangko Sentral is aware, at least in part, that there is a broad demand for bitcoin and other cryptocurrencies. In fact, the central bank last year issued a exploratory study They show that 53% of the country’s population, or 36 million people, do not have a bank account.
In light of this, Bangko Sentral recognizes that as virtual assistance programs provide opportunities to promote greater access to financial services at lower costs, He said central bank.
However, Bangko Sentral emphasized that they “also pose various risks that could undermine financial stability.”