Philippines to Tighten Virtual Asset Reporting Rules by January 1

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As a researcher with years of experience in financial regulation, I find the recent moves by the Bangko Sentral ng Pilipinas (BSP) to be both impressive and necessary. The proposed reporting system for Virtual Asset Service Providers (VASPs) is a significant step towards creating a transparent and secure ecosystem within the virtual asset market.

The Philippines is moving forward with regulating the virtual asset industry by introducing a fresh reporting system from the Bangko Sentral ng Pilipinas (BSP), which includes the launch of a reporting portal on January 1, 2025. Recently, a draft circular was made public detailing increased data submission obligations for providers of virtual asset services (VASPs).

Following the recent changes, Virtual Asset Service Providers (VASPs) are required to submit thirteen reports at defined intervals for comprehensive monitoring. Every month, they must submit two reports detailing transaction volumes, values, and total assets they hold. Furthermore, every three months, they need to provide seven data points including their operating office locations, websites, and demographic information about their account holders. There are also three additional reports required every six months. Lastly, an audited financial statement is needed annually.

This strategy aims to fill in missing data, reduce discrepancies in details, and enhance the general accuracy of information pertaining to virtual assets. By setting these standards, the Bangko Sentral ng Pilipinas (BSP) intends to create a clear and safe environment that fosters reliability and stability within the market for virtual assets, encouraging trust among its participants.

New Reporting Portal for VASPs

Starting from the first half of 2025, Virtual Asset Service Providers will carry on sending Money Service Business reports through their current channels. However, it’s important to note that after this period, these submissions should be made via a brand new reporting portal, unless the Bangko Sentral ng Pilipinas (BSP) provides different instructions. This change is intended to boost data collection efficiency, ultimately leading to better monitoring of virtual asset activities across the country.

As an analyst, I’m emphasizing that failing to adhere to revised reporting standards may lead to regulatory actions, reflecting the Banko Sentral ng Pilipinas’ (BSP) unwavering commitment to robust oversight. Virtual Asset Service Providers (VASPs) have until December 13 to share their feedback on the proposed framework. This will enable the BSP to consider industry viewpoints and finalize the system in a well-informed manner.

At present, there are 14 Virtual Asset Service Providers (VASPs) registered with the Bangko Sentral ng Pilipinas (BSP), out of which seven are actively in service. Some well-known companies among these are Maya Philippines, Philippine Digital Asset Exchange (PDAX), Betur Inc. (COINS PH), Bloomsolutions Inc, Direct Agent 5 (SurgePay Mobile App), Moneybees Forex, and TopJuan Technologies Corp. The BSP encourages the public to exercise caution when engaging in transactions with VASPs that are not registered or based overseas, as this can help minimize risks associated with unauthorized operators.

Philippines Bans Online Gambling

The Philippines is enhancing its financial oversight by dealing with virtual assets concurrently with other national security issues. In the month of July 2024, President Ferdinand Marcos Jr. imposed a prohibition on online gambling enterprises due to their association with crimes such as murder, kidnapping, and human trafficking. This ban particularly focuses on Philippine Offshore Gaming Operators (POGOs), which have been under scrutiny for allegedly participating in financial fraud, money laundering, and other unlawful activities that extend beyond their principal functions.

The central bank’s regulations regarding virtual assets are in line with the broader governmental action against POGOs, indicating a coordinated approach to enhance financial supervision and prioritize public safety. By implementing 13 additional reporting requirements, they are emphasizing their commitment to building a safe platform for virtual asset transactions, striking a balance between fostering innovation and enforcing strict regulatory guidelines.

In May 2020, the central bank released directives for virtual asset providers and services to minimize threats such as money laundering and terrorism financing. Recognizing the advantages of swiftness and cost savings in virtual asset transactions, they also emphasized the importance of tackling risks arising from anonymity, fast transaction speeds, volatile prices, and international scope.

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2024-11-25 13:46