Home Ethereum Central Bank of the Philippines Suspends Bitcoin and Crypto Service Provider Approvals for Three Years

Central Bank of the Philippines Suspends Bitcoin and Crypto Service Provider Approvals for Three Years

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Central Bank of the Philippines Suspends Bitcoin and Crypto Service Provider Approvals for Three Years

The central bank said virtual asset service providers pose a big risk but will allow existing businesses to continue operations or expand.

  • The central bank of the Philippines will not accept applications from virtual asset service providers for three years.
  • The bank says the institutions pose a varied risk to financial stability.
  • Previously existing service providers can still expand their operations and continue to operate based on regulatory compliance.

The Bangko Sentral, the central bank of the Philippines, will close the door to all Virtual Asset Service Providers (VASPs) seeking a license to operate in the country from September 1, through a announcement form the bank.

VASPs that have submitted an application and completed the second stage of approval by August 31 will still be processed and considered for approval. Additionally, previously approved VASPs will be able to continue to operate and be submitted for renewal if necessary. However, if applications do not meet the final stage of central bank requirements by August 31, the approval window will close for the aforementioned three years.

Meanwhile, if a VASP is looking to expand its operations, including non-custodial services, it will need to have a “stable” composite rating from the Philippines’ Bangko Sentral Asset Monitoring Framework and be currently listed as a supervised financial institution.

“The Bangko Sentral aims to strike a balance between promoting innovation in the financial sector and ensuring that associated risks remain at manageable levels,” the central bank said in the statement.

Indeed, financial regulators have become increasingly suspicious since market contagion swept across the broader cryptocurrency ecosystem. As financial institutions faced liquidity crisis and bailouts has become a regular conversation, some nation states have taken steps to try to maintain consumer confidence.

Despite regulatory pressures, the Bangko Sentral recognizes, at least in part, that there is strong demand for bitcoin and other cryptocurrencies. In fact, last year the central bank issued a investigation showing that 53% of the country’s population, or 36 million people, were unbanked.

“With this in mind, the Bangko Sentral recognizes that VAs provide opportunities to promote greater access to financial services at reduced costs,” said the central bank.

However, the Bangko Sentral reiterated that “they also pose varied risks that could jeopardize financial stability.”

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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