The Philippines’ central bank has proposed freezing new payment-system operator registrations for 12 months while imposing tighter controls on payment arrangements involving virtual asset service providers (VASPs). 

Under a draft circular, the Bangko Sentral ng Pilipinas (BSP) said it would suspend acceptance and processing of applications for operators of payment systems (OPS) to conduct a “holistic review” of its taxonomy and licensing framework. 

Applications submitted before the suspension could continue to be evaluated, but the BSP would not approve or deny any until the pause ends. Entities would be barred from starting activities that require OPS registration unless the regulator authorizes them otherwise. 

The proposal would require BSP-supervised institutions offering merchant acquisition services to handle regulated VASPs through direct merchant arrangements. Those relationships would be subject to enhanced due diligence and monitoring, transaction and settlement limits and other risk-based controls. 

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. VASPs are listed alongside gambling businesses, gaming providers, adult-oriented businesses and money service businesses.

The draft would take effect 15 days after publication if finalized, and the BSP is currently accepting feedback.

Cointelegraph reached out to the BSP for more information but did not receive a response before publication. 

Related: Philippines SEC flags dYdX, six crypto platforms as unauthorized