Virtual assets service providers (VASP) who intend to receive operational licenses from the Philippines Central Bank might not be able to anymore. The Bangko Sentral announced that it would not process any application for a VASP license for the next three years. Given that, any application not considered before September 1st will wait until after 2025.
According to a released memorandum addressed to VASP license applicants, the decision is subject to a reassessment of market development. The aim is to create a balance between promoting innovation in the financial sector and ensuring that associated risks remain within manageable levels.
A few pending applications have passed Stage 2 of the financial institution’s licensing process while others will be completed on or before 31st August. For such applications, an assessment will be conducted to ascertain their information sufficiency and completeness.
Based on Stage 3 requirements, the applications will be checked to know if it complies with the criteria for receiving a VASP license. Applications found to default will be returned and dubbed ‘closed’. That same application will not be attended to anymore by the Philippine Central Bank until after three years.
BSP Considers Crypto Entities With SAFr For VASP License
In addition, consideration was given to existing financial institutions which are supervised under the Bangkok central ng Pilipinas (BSP). Those who wish to enlarge their undertakings by becoming a VASP can still apply for a license. Interestingly, the offer is open to non-custodial VASPs who plan to transition to safekeeping custodial services.
In as much as these entities can still apply, they must have a Supervisory/Assessment Framework (SAFr). Identically, these entities must have reached a standard composite rating of at least ‘stable’.
Many other metrics to be assessed are client sustainability, onboarding procedures, financial consumer education, and awareness programs. Once all these are assessed and approved as compliant, the application processing will begin.
While the BSP is following in the craze for crypto adoption, it is careful to analyze the risks involved.
In the first quarter of this year, BSP began a research program into a central bank digital currency (CBDC). The research program was tagged ‘Project CBDC-Ph’ by the governor of the bank, Benjamin Diokno. So far, no CBDC has been released by the BSP but the piloting phase is ongoing.