Name
Global FinTech Guide
Country _ Name
Philippines
SectionTitle
DLT and cryptocurrencies
Body
FinTechs belonging to this category offer financial services using crypto currencies. This category also includes FinTechs utilising blockchain and distributed ledger technologies (DLT) upon which Bitcoin and Ethereum are based, among others. FinTechs develop and do research in this field in order to create new services – e.g. crypto currency exchange markets, wallet providers, NFTs-related services, new payment services, "smart contracts" or new clearing and settling services.

Introduction

Attitude of the country towards financial services using crypto currencies

The BSP regulations on virtual asset service providers (VASPs) are fairly recent, and this is seen as the policymakers trying to catch up with virtual asset (VA) systems that are delivering financial services in faster and more economical means. Acceptance and use of VASPs is on the rise in the Philippines, and there do not appear to be any significant reservations on the roll-out of such services here, provided of course, that licensing and related requirements are complied with.

Similarly, the SEC has recently introduced its own regulatory framework for Crypto Asset Service Providers (CASPs), signaling that crypto-related financial services are not only accepted but are also subject to oversight by both the BSP and the SEC, depending on the nature of the services involved. This reflects a broader national attitude of cautious openness toward the crypto industry.



Legal affairs

Obligations and requirements to provide financial services using crypto currencies described above

Entities that intend to operate as VASPs in the Philippine should obtain a Certificate of Authority (COA) to operate as a VASP from the BSP. The application is a three-stage process, where (a) Stage 1 refers to the assessment of BSP of applicant's eligibility to apply as a VASP; (b) Stage 2 refers to the issuance of the BSP's letter of no objection for the applicant to register with the SEC; and (c) Stage 3 refers to the application for the COA.

VASPs with safekeeping and/or administration services for VAs are required to have a minimum paid-in capital of PhP50 million (approx. US$959,141) and should pay licensing fees of PhP100,000 (approx. US$1,918) to the BSP. If the VASP does not provide such services, the minimum paid-in capital is reduced to PhP10 million (approx. US$191,828) and the licensing fee is reduced to PhP20,000 (approx. US$384).
Entities that provide crypto asset services such as trading, brokering, custody, issuance, and exchange of security type crypto assets are required to register as CASPs with the SEC. These entities are required to be duly incorporated as stock corporations with the SEC, explicitly stating crypto-asset services in their corporate purposes. They must maintain a minimum paid-up capital of ?100 million and establish a physical office in the Philippines. In addition, CASPs must submit a comprehensive set of documentation covering their operational frameworks, risk management plans, IT systems, market surveillance mechanisms, client onboarding procedures, and business continuity plans. Before offering any crypto-assets to the public, CASPs are also required to file disclosure documents with the SEC that detail the issuer, associated risks, and key features of the crypto-assets. Furthermore, marketing and solicitation of these crypto-assets are restricted to registered entities to safeguard investor interests.

Persons or entities intending to provide services in the Philippines would generally be considered doing business in this jurisdiction and therefore, must also register and obtain a primary license from the SEC. This entails submission of documentary requirements with the SEC depending on the corporate vehicle (subsidiary or branch) intended to be established.



Additional comments regarding the legal situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area

The BSP's current VASP regulations do not cover businesses involved in the participation and provision of financial services related to an issuer's offer and sale of VA (which fall within the jurisdiction of the SEC’s rules on CASPs) and entities solely acting on their own behalf (i.e. not engaged in the business of actively facilitating VA-related activities for the account of others).

In addition, since the BSP has oversight over VASPs, the BSP may deploy enforcement actions and impose sanctions on the entity, its directors and/or officers for violations of BSP regulations. Similarly, the SEC exercises enforcement authority over CASPs and can impose penalties or suspend operations for non-compliance with its rules.

Finally, entities operating as VASPs and CASPs, even if operating outside the Philippines, may be required to register in the Philippines for Value-Added tax (VAT
) purposes if it will engage in the sale of digital services that are consumed or used in the Philippines (i.e., for services which require payment of a fee) and if: (i) its gross sales for the past 12 months, other than VAT-exempt sales, have exceeded the VAT threshold (currently PhP3 million, approx. US$54,000); or (ii) if there are reasonable grounds to believe that its gross sales, other than VAT-exempt sales, will exceed the VAT threshold. Under the rules and regulations of Republic Act No. 12023, “Digital Services” refers to any service that is supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. It shall include, but is not limited to digital goods, which are intangible goods that are delivered or transferred in digital form, including sounds, images, data, facts, or combinations thereof, such as virtual assets.

Digital services also include e-commerce platforms and payment processing; targeted digital marketing and analytics; communication tools and collaborative software; e-learning platforms and professional networking; data analytics and Artificial Intelligence for business insights; cybersecurity and regulatory compliance; masking and encryption services (e.g., virtual private network services); system maintenance and optimization for digital services; online consultations through a digital platform (i.e., website, applications, e-marketplace); and interactive media, like online gaming and Augmented and/or Virtual Reality (AR/VR) experiences.



Economic conditions

Market size for financial services using crypto currencies and biggest companies in this business area

Based on publicly available information from the BSP as of 15 May 2025, there are 13 registered VASPs, three of which are marked as “Inactive/Not Operational.”



Additional comments regarding the economic situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area

On 10 August 2022, the BSP announced that it will suspend the grant of new VASP licenses for three years starting from September 2022 (or until September 2025). Meanwhile, existing BSP-supervised financial institutions who wish to expand their services to add VASP may still apply for a VASP license if they meet a Supervisory Assessment Framework rating requirement of “stable” or better.



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