The Philippines has tightened crypto regulations, mandating rigorous due diligence for virtual asset listings and banning privacy coins like Monero and Zcash.
Summary
- The Bangko Sentral ng Pilipinas (BSP) has mandated that all Virtual Asset Service Providers (VASPs) implement rigorous due diligence and accreditation processes before listing any virtual assets.
- The new regulations specifically prohibit anonymity-enhancing cryptocurrencies, such as Monero and Zcash, from being offered on local exchanges.
- This move is part of a broader initiative to reinforce crypto regulations that began with licensing requirements from the Securities and Exchange Commission (SEC).
The Bangko Sentral ng Pilipinas (BSP) has taken significant steps to tighten regulations governing the cryptocurrency market in the Philippines. Under new guidelines, all licensed Virtual Asset Service Providers (VASPs) must conduct comprehensive due diligence and accreditation before listing any digital assets on their platforms.
Deputy Governor Lyn Javier emphasized that the aim of these regulations is to enhance financial stability and protect customer interests by ensuring that virtual asset services are secure and consumer-oriented.
Notably, the BSP has banned the listing of anonymity-enhancing cryptocurrencies, commonly known as privacy coins, which will exclude assets like Monero and Zcash from compliant exchanges in the country.
The memorandum also requires exchanges to continuously monitor their listed assets, establishing criteria for potential suspensions or delistings based on factors such as liquidity loss or security breaches. Alden Yburan, head of crypto at GCash, commented that while the ban on privacy coins may have implications, it is necessary for maintaining trust in the financial ecosystem, especially given the Philippines' substantial remittance market.
Furthermore, VASPs must coordinate with securities regulators to ensure compliance with the SEC's rules if a token is classified as a security. The regulations come as part of a year-long effort to bolster crypto oversight in the country, which began with the SEC's licensing framework and restrictions on offshore exchanges.
Dual Regulatory Framework
These listing regulations operate within a dual framework, where crypto companies must report to both the SEC and the BSP. The SEC oversees crypto-asset service providers regarding securities regulations, while the BSP issues licenses for payment and transaction services. In June, the SEC introduced new requirements for local registration and minimum capital for crypto-asset service providers.
As part of this crackdown, the SEC has restricted access to several offshore platforms, including OKX and Kraken, to promote compliance among local operators.
In a related development, Binance is attempting to re-enter the Philippine market through a partnership with BlockShoals Technologies, which has received preliminary SEC approval. However, the BSP has clarified that neither company holds a VASP license, and participation in the regulatory sandbox is not a substitute for obtaining central bank approval.
