BSP Tightens Crypto Oversight, Warns Against Untraceable Digital Asset Transactions

 

The Bangko Sentral ng Pilipinas is reinforcing its position that cryptocurrency activity in the Philippines must remain within a regulated financial framework, with transaction traceability emerging as a central concern.

BSP Governor Eli Remolona Jr. said the central bank wants virtual asset transactions conducted through licensed virtual asset service providers, where customer identities can be established through know-your-customer requirements. The approach gives regulators a clearer trail when investigating potentially fraudulent or suspicious activity.

The distinction becomes more significant when digital assets are transferred directly between personal wallets. In such transactions, authorities may have access to technical information such as an IP address, but that does not necessarily establish the identity of the person controlling the wallet.

For the BSP, that gap creates a regulatory challenge. The central bank is particularly concerned about the potential use of cryptocurrencies in fraud, cybercrime and other activities where identifying the individuals behind transactions can become difficult.

Remolona also acknowledged that cryptocurrency-related scams have occurred in the Philippines, although he said the scale has so far appeared smaller than cases reported in the United States and other jurisdictions.

The BSP has maintained a moratorium on issuing new virtual asset service provider licenses since September 2025. The policy was introduced amid continuing concerns over consumer protection and cybersecurity risks, despite the growing role of blockchain technology in financial services. The central bank has said the moratorium may be reassessed as conditions in the domestic and international markets evolve.

The regulatory environment is also being shaped by developments involving major cryptocurrency platforms. In 2024, the Securities and Exchange Commission moved to restrict access to Binance in the Philippines after determining that the exchange had been providing investment and trading services without the required local registration and licenses.

Binance later announced a partnership with Philippine-registered BlockShoals Technologies Inc., an approved participant in the SECs Strategic Sandbox framework. The sandbox allows companies to test financial technologies and business models under controlled regulatory supervision.

The developments indicate that Philippine regulators are not necessarily closing the door on digital assets. Instead, they are attempting to establish a system where innovation can proceed without sacrificing customer identification, transaction monitoring and accountability.

For the BSP, regulated access functions much like a financial checkpoint. Transactions can still move through the system, but the institutions facilitating them are expected to know who their customers are and maintain records that can help authorities follow the trail when problems arise.

As cryptocurrency adoption expands, the challenge for regulators will be balancing technological innovation with safeguards designed to prevent digital assets from becoming an easy channel for anonymous and potentially illicit transactions.