Philippine central bank to license cryptocurrency trading and custody firms

The Central Bank of the Philippines expanded its scope of cryptocurrency regulation to include all cryptocurrency financial service providers.

In line with the emergence of clear crypto regulations in Southeast Asia, the Philippines‘ central bank, BSP, has enacted a comprehensive licensing regime for digital asset companies in the country.

According to the Philippine Daily Inquirer, all crypto financial services firms in the country are now required to be licensed by the BSP.

The Philippine central bank is not ready for a CBDC.
Therefore, exchanges operating crypto-to-crypto trading pairs and custody platforms must now obtain approval from the central bank. The expanded regulatory regime also covers crypto derivatives platforms.

All cryptocurrency firms in the country will also be required to comply with global financial best practices, including anti-money laundering and counter-terrorist financing. As a result, cryptocurrency transfers above a certain threshold will require identification information for both the issuer and the beneficiary.

For Benjamin Diokno, governor of the BSP, the expanded regulatory regime is necessary to keep up with the pace of development in the crypto space over the past three years. In 2017, the BSP issued rules for exchanges involved in fiat-crypto trading pairs.

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According to Diokno, the new rules will eliminate any regulatory loopholes in the crypto financial services ecosystem and add that the central bank is committed to striking a balance between promoting financial innovation and maintaining its supervisory responsibilities.

In 2020, the BSP reportedly began considering the issuance of a central bank digital currency. However, the Philippines‘ main bank came out to say that it is not ready to create a sovereign digital currency, but is actively monitoring the scene.

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Southeast Asia remains a global hub for open finance with a positive disposition towards emerging technologies. Markets such as Singapore and Thailand already have a sophisticated electronic payments ecosystem.

As Cointelegraph previously reported, Asia accounts for almost 50% of global cryptocurrency trading.