Philippines Moves to Thwart Money Laundering with New Guidelines for Cryptocurrency Firms
============================================================
The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has released new guidelines aimed at preventing money laundering and ensuring financial stability in the country’s burgeoning cryptocurrency sector. The move comes as the BSP seeks to strike a balance between encouraging innovation and safeguarding the integrity of the financial system.
New Framework for Virtual Asset Service Providers
Under the new framework, virtual asset service providers (VASPs) will be required to obtain a “certificate of authority” from the BSP before operating as money sending businesses. VASPs will also need to comply with existing regulations for financial services providers, covering areas such as:
- Liquidity and operational risk
- IT risk
- Internal controls
- Consumer protection
- Anti-money laundering measures
Minimum Capital Requirement
To operate in the country, VASPs will be required to have a minimum capital requirement of:
- 50 million Philippine pesos (approximately $1.08 million) if they provide custody services
- 10 million pesos ($208,000) if not
Customer Due Diligence and Transaction Monitoring
The BSP has also specified that VASPs must conduct their own customer due diligence and treat cryptocurrency transactions as cross-border wire transfers.
Suspicious Activity and Payout Restrictions
Suspicious activity or single transactions exceeding 50,000 pesos ($1,000) will require extra due diligence and payout restrictions, according to the BSP.
International Standards
The guidelines are based on international standards for regulators issued by the Financial Action Task Force (FATF), and aim to prevent the misuse of cryptocurrencies in money laundering schemes.
Expected Impact
The move is seen as a significant step towards regulating the country’s cryptocurrency sector, which has experienced rapid growth in recent years. The BSP has stated its support for an environment that encourages financial innovation while ensuring the integrity and stability of the financial system.
Timeline
The new guidelines are expected to take effect soon, with VASPs required to comply with the regulations within a specified timeframe.
Overall, the new guidelines demonstrate the BSP’s commitment to maintaining a stable and secure financial system, while also supporting the growth of the cryptocurrency sector in the Philippines.