From moratorium to momentum: How 2025 could transform Philippine cryptocurrency

By Pierce Oel A. Montalvo, Researcher

THE PHILIPPINE cryptocurrency industry that emerges this year may look vastly different from the one that entered the central bank’s moratorium.

Recall that last September 2022, the Bangko Sentral ng Pilipinas (BSP) halted registrations for new Virtual Asset Service Provider (VASP) licenses.

According to Section 902-N of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI), virtual assets (VAs) may refer to any type of digital-unit that can be digitally traded, or transferred, and can be used for payment or investment purposes.

Cryptocurrencies are treated as VAs exchanged through a VASP. As of May 2025, 13 companies hold VASP licenses.

But on May 30, the Securities and Exchange Commission (SEC) finally released their Crypto-Asset Service Provider (CASP) Rules and Guidelines, which aims to provide further regulations on cryptocurrency service providers and crypto-adjacent firms.

Meanwhile, the BSP moratorium for VASP licenses is set to expire in 2025.

These twin developments signal a pivotal moment, reshaping how crypto businesses operate, how investors are protected, and how innovation navigates a more defined regulatory landscape.

SEC’S NEW RULES
Cryptocurrency continues to grow in the Philippines. In an interview with Bloomberg TV last January, Finance Secretary Ralph G. Recto said that P6 trillion worth of crypto investments is being done in the Philippines.

However, the SEC has made moves in the past to regulate cryptocurrency firms. Last year, the commission requested the National Telecommunications Commission as well as the app markets of Google and Apple to block access to crypto exchange Binance, as the exchange failed to secure a license to solicit funds from the public or operate exchanges for securities.

The SEC’s move into the crypto space is deliberate, aiming to address risks distinct from those overseen by the BSP.

“Investment or securities-related crypto activities fall under the jurisdiction of the SEC,” the SEC’s PhiliFintech Innovation Office stated in an e-mail message.

“The proposed SEC Rules for CASPs, when compared to BSP’s existing VASP regulations, have different objectives in terms of addressing risks in the crypto market in the Philippines.”

Republic Act No. 11765 or the Financial Products and Services Consumer Protection Act empowers the Commission to oversee financial products other than traditional securities.

“Under this law, crypto-assets that take the form of investments fall within the jurisdiction of the SEC,” it added.

Under the new SEC rules, a “crypto-asset” is defined as “a cryptographically secured digital representation of value or of a right that relies on a cryptographically secured distributed ledger or a similar technology.”

Likewise, a CASP is defined as an entity that, as a business, offers or engages in the provision of one or more crypto-asset services.

These services include offering crypto-assets to the public or operating a crypto-asset trading venue.

The rules state that “crypto-assets shall not be sold, offered for sale, or distributed in the Philippines without complying with the provisions of these Rules and the CASP Guidelines.”

Under these rules, crypto-assets generally cannot be offered or sold in the Philippines without filing a disclosure document with the SEC and publishing it at least thirty days before any marketing or offering.

If a crypto-asset qualifies as a security, it requires a registration statement approved by the SEC.

“Once a crypto-asset takes the form of an investment or security, an obligation arises on the part of CASPs to comply with the standards set, such as those on public offerings, disclosures, registration, marketing, and intermediation activities,” the SEC office said.

Meanwhile, the CASP guidelines show that a CASP applicant must be a corporation registered with the SEC, indicate the operation of a CASP in its primary purpose, and have a minimum paid-up capital of at least P100 million in cash or property, excluding crypto-assets.

Applicants must also have a physical office located in the Philippines, which must be appropriately staffed or manned during regular business hours.

“Once the final and approved CASP Rules and Guidelines are published, all existing natural or juridical persons that fall within the scope of these regulations — including BSP-licensed VASPs — will have thirty (30) days from the date of publication in two (2) newspapers of general circulation to begin complying with the new requirements,” the SEC office added.

BSP’S EVOLVING STANCE
BSP, which has been the primary regulator for entities dealing with VAs as payment instruments, maintains its focus on financial stability and consumer protection.

“The moratorium for new VASP applications is currently under review,” the central bank said in a separate e-mail interview.

“Key considerations include the developments in the local and global VASP landscape and the results of supervisory activities, among others.”

The BSP has sustained its regulation of VASPs during the moratorium. Last year, it revoked the license of VASP and remittance company Atomtrans Tech Corp. In 2023, it canceled the certificates of registration of Coinville Phils., Inc. and Bexpress, Inc.

When evaluating new applicants post-moratorium, the BSP said it would prioritize corporate governance structure and the applicant’s capacity to manage risks in anti-money laundering, IT cybersecurity, and consumer protection.

It will also evaluate applicants’ business models to determine whether they support the BSP’s digitalization and financial inclusion agenda.

Furthermore, the central bank said that it is planning to adjust minimum capital requirements in its rules, to ensure VASPs can continue to provide services amid tumultuous market conditions. The proposed new capital requirements stem from evaluations during regular VASP examinations and are currently awaiting industry feedback.

The MORNBFI currently sets minimum capital requirements for VASPs at P10 million for those without safekeeping and/or administration services for VAs, and P50 million for VASPs with such services (i.e., VA custodians).

Post-moratorium, the BSP is also working to enhance control measures over corporate governance particularly concerning Related Party Transactions (RPTs), improve liquidity management to ensure continuous service, and reinforce requirements for the proper recording and segregation of customer VAs from proprietary VAs.

The central bank will approach the moratorium considering recent incidents like the Bybit crypto exchange breach, crypto exchange and hedge fund FTX’s corporate governance collapse, widespread scams and rugpulls in the crypto industry, and market volatility.

“The moratorium has enabled the BSP to lay the groundwork for a more bespoke regulatory environment for VASP,” the BSP said.

NAVIGATING DUAL FRAMEWORKS
The introduction of the SEC’s CASP framework alongside the BSP’s existing VASP regulations necessitates clear coordination to prevent undue burden on industry players.

“The BSP and SEC have existing coordination mechanisms, such as the Financial Sector Forum,” the BSP said.

It added that both regulators are “closely working on the review of existing rules and regulations on VASPs, focusing on key aspects such as scope of regulatory and supervisory powers, information sharing, alignment of reporting requirements, and consultation about emerging products and services.”

The SEC echoed this, noting that its primary strategy for existing BSP-licensed VASPs revolves around “close collaboration and formal agreements with the BSP,” as the commission continues to work on a Memorandum of Agreement (MoA) with the central bank.

This MoA specifically addresses jurisdictional overlaps to ensure a smooth transition to a well-regulated financial market for investors in cryptocurrency.

INNOVATION MEETS REGULATION
Wei Zhou, chief executive officer (CEO) of Coins.ph, expressed a desire for a regulatory framework that enables local players to compete fairly with offshore exchanges that aggressively market a wider range of products, such as derivatives and margin trading, to Filipinos.

Coins.ph is a VASP duly registered with the BSP as a remittance and transfer company, serving over 16 million users.

Mr. Zhou said that his company built its business in accordance with the existing BSP VASP regulations. He anticipated that the Philippines might align its rules with developments in the US regulation for cryptocurrencies and suggested a cautious approach to avoid frequent operational changes.

“What I would love to have is a regulatory framework that allows us to provide these products and services so that at least day-to-day normal Filipinos have financial access, have financial empowerment,” he said in a Google Meet interview.

Mr. Zhou also pointed to the potential for crypto technology beyond common trading, envisioning their exchange as a platform for tokenized real-world assets, including local agricultural commodities like cacao or coffee beans, if the regulatory framework would permit.

“Don’t try to regulate for the past. Try to build, you know, rules for the future, right?” Mr. Zhou said.

Jiro Reyes, CEO of Bitskwela, a crypto education platform, said that the proposed CASP regulations as a “step in the right direction,” covering necessary bases from investor protection to operational standards.

However, Mr. Reyes advocated for a tiered licensing system under the SEC’s CASP framework.

He said that the P100 million paid-up capital requirement, while sensible for large exchanges, could “unintentionally shut out smaller builders, communities, and education-focused organizations who still want to operate responsibly in the space.”

“I personally know a lot of passionate and credible teams in the local Web3 scene who are building real value, but don’t have that kind of capital yet. A more flexible, tiered system — maybe based on risk level or business type would give them a pathway to legitimacy without being held to the same standards as major financial intermediaries,” Mr. Reyes said.

Both Mr. Reyes and Mr. Zhou highlighted the need for greater clarity and a supportive environment for innovation.

“Harmonization is long overdue — and honestly, it’s one of the biggest unlocks we need for Web3 to thrive in the Philippines,” said Mr. Reyes on the coordination between the BSP and SEC.

“What you don’t want is like you want to do something and then everybody else but the Philippines is doing it. And then there’s no guidance on how to do it here in the Philippines. I think that’s what we don’t want to happen,” said Mr. Zhou.

As the Philippines continues refining its efforts in allowing its local crypto industry to develop, the interplay between these regulatory efforts and the industry’s bleeding edge in financial technology can only give way to further developments.