The Bangko Sentral ng Pilipinas has issued a draft circular that would suspend the acceptance and processing of new applications to register as an operator of a payment system for a period of 12 months. The central bank stated that the pause is intended to support a holistic review of its taxonomy, registration process and licensing framework for payment-system oversight.

Applications already submitted before any freeze takes effect could continue through the evaluation process. However, the regulator would withhold decisions on approval or denial until the 12-month period concludes. Entities would also be prohibited from commencing activities that require operator of payment system registration during the suspension unless the central bank grants separate authorization. Existing registered operators would not be required to cease operations under the draft.

Tighter Requirements for Virtual Asset Service Providers

The draft places particular focus on payment arrangements that involve regulated virtual asset service providers. Bangko Sentral ng Pilipinas-supervised institutions that offer merchant acquisition services would be required to establish direct contractual relationships with these firms rather than relying on layered or intermediary structures.

Only virtual asset service providers that hold a license, registration or authorization from the Bangko Sentral ng Pilipinas, the Philippine Securities and Exchange Commission or another relevant authority would qualify for such access. Unregistered and offshore platforms would be excluded from these payment rails.

Institutions dealing with covered firms would face obligations for enhanced due diligence, closer transaction monitoring and risk-based limits. These limits could apply to transaction values, settlement schedules and overall exposure levels. The draft groups virtual asset service providers with other categories that the regulator views as requiring heightened scrutiny, including casinos, gaming operators, adult-oriented businesses and money-service businesses.

Supervised institutions would also need to identify any existing layered payment arrangements involving covered merchants. They would then have six months to complete a review of those structures and a further six months to remedy identified issues. Remedies could include contract restructuring, the imposition of limits or the termination of arrangements that fall outside an institution’s risk tolerance.

National QR Code Merchant Database

Beyond the registration pause and virtual asset controls, the proposal includes plans for a National QR Code Merchant Database. The database would store merchant identities, business registration details, payment providers, settlement accounts and risk classifications. The central bank aims to improve the ability of financial institutions to identify merchants and maintain clearer visibility of payment flows from the receiving merchant through to the processing institution.

Consultation and Timeline

The circular remains an exposure draft and is open for written comments from stakeholders. No freeze or new rules take effect solely because the draft has been published. The Bangko Sentral ng Pilipinas may adjust the duration of the suspension, implementation periods or the scope of covered arrangements after reviewing feedback.

If the proposal is adopted in its current form, the circular would become effective 15 days after publication in the Official Gazette or a newspaper of general circulation. The 12-month pause on new applications would then operate according to the final text. The measures build on earlier steps the central bank has taken to strengthen oversight of virtual asset activity, including tighter token-listing and monitoring requirements introduced for licensed providers earlier in the year.

Banks, electronic-money issuers, merchant acquirers and payment facilitators that connect virtual asset platforms to local channels would need to monitor the final provisions closely, particularly those governing pending applications and existing relationships with regulated virtual asset service providers.