The Philippines pauses digital asset licenses for 3 years

The Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank, has paused issuing licenses for new virtual asset service providers (VASP) for three years in a bid to balance the potential risks associated with digital assets.

Image credit: Timmy Loen

As part of a “modified approach,” the regular application window for new VASP licenses will be closed for three years, starting September 1.

However, the central bank will process the applications that have passed the second stage of the licensing process on or before August 31. Currently, there are 19 institutions with VASP licenses in the Philippines, according to data by the BSP.

The central bank said it aims to strike a balance between promoting innovation in the financial sector and ensuring that risks remain within “manageable levels.”

“The Bangko Sentral recognizes that as VAs (virtual assets) offer opportunities to promote greater access to financial services at reduced costs, they also pose varied risks that may undermine financial stability,” the BSP said in a statement.

See also: The Philippines: Asia’s next crypto hub?

In July, the Philippines’ central bank governor Felipe Medalla said the country has no plans to prohibit cryptocurrencies.

The move to pause VASP licenses comes as Asian countries seek better ways to manage the digital assets. For instance, India is moving closer to banning cryptocurrencies, altogether while countries like Singapore are looking to regulate them.