Philippines Moves to Freeze New Crypto Payment Licenses for a Year

• The Philippines proposed a 12-month freeze on new payment operator registrations.
• Pending applications stay under review but get no approval or denial until the freeze ends.
• Banks onboarding crypto firms must switch to direct merchant deals and drop layered intermediaries.
• The move extends a multi-year tightening of Philippine crypto and payment rules.

The Philippines is preparing to close its payment licensing door for a full year. A draft circular from the Bangko Sentral ng Pilipinas (BSP), signed off by Governor Eli M. Remolona Jr., would stop the central bank from accepting any new Operator of Payment Systems (OPS) registration for twelve months. The pause is not administrative housekeeping. Across that year the regulator plans to rebuild its payment classification taxonomy and rewrite the licensing framework that decides how money moves through the country’s rails. The draft carries a second payload aimed squarely at crypto: banks that acquire merchants for Virtual Asset Service Providers will have to strip out the layered intermediaries they currently lean on.

The one-year window that leaves applicants stuck in limbo

The BSP will stop accepting and processing incoming OPS submissions outright. Firms that filed before the freeze land in a strange middle ground. Their applications keep moving through technical evaluation, yet the central bank has stated plainly that it will issue neither approvals nor denials until the twelve months are up. Any platform operating without registration stays barred from switching on commercial payment functions during the review.

The text arrives as a consultative draft, so it enters a standard feedback window for industry and public comment before anything binds. Once the BSP ratifies it, the circular takes effect 15 days after publication.

Why Philippine banks must now face crypto merchants directly

The VASP provisions rework how supervised institutions plug digital-asset businesses into the payment system. Banks and other BSP-regulated firms that provide merchant acquisition services must move to direct merchant arrangements when they onboard a VASP. Multi-tiered settlement chains, where one processor sits behind another behind another, get systematically restricted. The regulator wants those blind spots gone.

Supervised partners also take on a heavier compliance load over their crypto merchants: enhanced due diligence, transaction velocity limits, continuous settlement monitoring, and risk-based controls. The scope reaches wide. The rules apply to any digital-asset firm licensed by the BSP, the Philippine Securities and Exchange Commission (SEC), or a recognized international regulator.

The draft does not treat crypto as its own category. It files VASPs alongside casinos, online gambling operators and adult-content merchants under a single high-risk bracket, all of which banks may onboard only through direct arrangements. Supervised institutions get six months from the circular’s effectivity to audit every existing merchant account, and a full year to fix or terminate any arrangement that does not fit the new rules.

The settlement blind spot Manila spent years chasing

Peer-to-peer mobile transfers and local QR networks grew far faster than the analytical tooling inside domestic clearinghouses. That gap is the whole problem. When settlement runs through several stacked intermediaries, investigators lose sight of who the final merchant or recipient actually is, and a real-time freeze on a suspicious flow becomes close to unworkable. Collapsing those chains into direct arrangements gives supervisors a clean line of sight. The draft pairs that with a National QR Code Merchant Database, a central registry meant to log each QR-Ph merchant’s identity, ownership and sanctions status so institutions can flag a problematic seller across networks rather than one bank at a time.

There is external pressure behind the design as well. The Philippines has spent years under international scrutiny over money-laundering and fraud risk, and clamping down on payment processors keeps the wider financial system walled off from unmonitored crypto on and off-ramps. The consumer angle stays blunt in the regulator’s messaging: the government offers no backing and no redress for retail losses on foreign or unvetted crypto services.

Manila picks containment while Singapore and Hong Kong court capital

Southeast Asia is splitting into two camps on digital-asset policy. Hong Kong, Singapore and parts of Thailand keep building regulatory sandboxes to pull in Web3 capital and licensed operators. Manila has walked the other way, toward near-total containment. Freezing both new VASP licenses and new OPS registrations produces a side effect the regulator has not advertised but cannot avoid: it shields the firms already inside the gate. Established payment gateways and compliant local wallets now face no threat from a new, more agile rival for at least a year.

What the freeze changes for Dash and other foreign entrants

Cross-border firms scouting the market feel this first. Any foreign entrant now has to work through localized capital requirements, local staffing setups, and the overlapping mandates of the BSP and the SEC before it can move. For incumbents, the calculus flips into an advantage, since the competitive field stays fixed while everyone else waits.

The draft is still open for consultation, and that detail matters more than it looks. The taxonomy rewrite sitting underneath the freeze could redraw the line for what counts as an Operator of Payment Systems in the first place, potentially pulling businesses that never saw themselves as payment operators into scope. That definitional fight, rather than the twelve-month clock itself, is what stakeholders will push against during the comment period, and it will decide which firms even need a license when the window reopens.