Central Bank of the Philippines orders supervised institutions to deal only with authorised virtual asset providers and restrict retail access to offshore platforms

The Central Bank of the Philippines (Bangko Sentral ng Pilipinas, BSP) issued a memorandum reminding BSP-supervised financial institutions (BSFIs) to apply robust risk management and anti-money laundering and counter-terrorism and proliferation financing controls when dealing with virtual asset service providers (VASPs) and other counterparties. BSFIs must deal only with BSP-authorised VASPs, Securities and Exchange Commission-authorised crypto asset service providers, and offshore providers that are duly licensed or authorised in their home jurisdictions, supported by proof of registration and independent validation against BSP and Anti-Money Laundering Council (AMLC) lists and reliable foreign registers. Dealings with unlicensed, unauthorised or unregistered VASPs and institutions are strictly prohibited, and BSFIs are not allowed to provide retail customers residing in the Philippines with direct access to offshore VASPs unless those platforms are registered with the BSP or the Securities and Exchange Commission. The memorandum also sets expectations for counterparty risk assessments, enhanced due diligence and ongoing monitoring, including checks for adverse media, assessment of compliance with Financial Action Task Force (FATF) Recommendation 16 on payment transparency, periodic sanctions screening, defined termination triggers, and risk-based controls or limits for virtual asset-related transfers. Violations of the relevant provisions in the Manual of Regulations for Banks and the Manual of Regulations for Non-Bank Financial Institutions are subject to applicable sanctions and penalties, and the memorandum supersedes BSP Memorandum M-2019-021.