Bangko Sentral ng Pilipinas (BSP) plans to halt new registrations of payment system operators for 1 year and apply stricter management standards to payments linked to cryptocurrency businesses.

Cointelegraph reported on Sept. 7 that a draft circular recently released by the BSP proposed suspending the receipt and processing of new registration applications for 12 months to fully review the classification and licensing framework for operators of payment systems (OPS).

Applications submitted before the suspension can continue to be reviewed, but no approval or rejection decisions will be made during the 12-month period. New businesses that require OPS registration will also be barred from starting unless they receive separate permission. The measure does not suspend operations of existing registered operators.

Rules for crypto-related payments will also be tightened. If BSP-supervised banks or e-wallet and payment firms provide merchant acquiring services, they must sign direct contracts with regulated virtual asset service providers (VASP). The aim is to reduce multi-layer intermediary structures so it is easier to track the actual merchant and the recipient of funds.

These transactions will be subject to enhanced customer identification and due diligence, ongoing monitoring, and controls such as transaction and settlement limits according to risk levels. The scope covers virtual asset businesses that require authorisation or registration not only from the BSP but also from relevant authorities such as the Philippine Securities and Exchange Commission (SEC).

The draft classified VASPs as an industry requiring enhanced management, alongside gambling and gaming operators, adult businesses and money services such as remittances and foreign exchange. It does not allow merchant relationships with operators that do business without the required authorisations.

The BSP said the revamp aims to clearly identify the actual merchant and final recipient of funds in the payment process and reduce fraud and illegal flows of funds. It is currently collecting feedback on the draft, and if finalised it will take effect 15 days after publication.