Philippines Suspends New Business Applications for Virtual Asset Services

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The Central Bank of the Philippines has stated that it will stop accepting applications for new licenses from virtual asset service providers. As of September 1, the operation is paralyzed for three years. The Central Bank published a memorandum announcing the decision. This is an important development for the Philippines and its cryptocurrency community.

In addition, the Bangkok Sentral affirms that it will carry out a reassessment of its decision based on the cryptocurrency market evolution. However, the bank states that the main objective of this decision is to maintain a balance in promoting innovation and ensuring risk management at all financial levels. In addition, the bank believes that virtual asset service providers provide greater access to financial services for users at a lower price. But at the same time, they pose an imminent threat to the financial stability of the state.

What’s next for the Philippines cryptocurrency community?

According to the central bank’s announcement, requests for VASP license who have completed the phase 2 licensing process before August 31st will proceed without any issues. However, applications with incomplete requirements will be closed by the bank. So far, 19 companies offer virtual asset and cryptocurrency services to consumers.

Companies supervised by the Bangko Sentral will be able to expand their cryptocurrency operations. They may also apply for a VASP license. However, they must have the composite rating of “stable” according to the Supervisory Assessment Framework (SAFr). The bank intends to focus on long-term financial consumer education and awareness programs.

Earlier, the Bangko Sentral revealed that about 53% of the country’s adults are unbanked. This shows that there is great potential for the use of cryptocurrencies as an asset class and monetary mechanism. Therefore, the government feels a greater need for financial inclusion in order to have sustainable growth in the sector.

Reports suggest that the country’s unbanked are turning to digital money for their financial transactions. This poses a threat to the country’s conventional monetary system and limits its potential. But at the same time, the adoption of online transaction methods is proceeding at a slow pace.

Under these circumstances, it was assumed that cryptocurrencies were to be a major player in the country’s financial sector. Nonetheless, the ban imposed by the central bank will have an impact on the country’s growing cryptocurrency community. It will also limit the reach of many companies that wanted to expand their operations in the Philippines.



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