The Bangko Sentral ng Pilipinas (BSP) is still studying play-to-earn, Pokemon-style Axie Infinity’s possible status as an operator of payment system (OPS) which would necessitate its registration with the BSP.
BSP Governor Benjamin E. Diokno said the review is ongoing on the use of non-fungible tokens (NFT) and monitoring of the various online gaming platforms. NFTs are gaming points converted into earnings and these tokens are assets.
“The BSP continues to conduct surveillance activities and assess the material (and) prudential implications of the rising use of Axie Infinity and non-fungible tokens,” said BSP Governor Benjamin E. Diokno in a virtual press briefing.
The BSP has been monitoring how Axie Infinity game players are exchanging tokens or cryptocurrency assets known as Smooth Love Potion (SLP) as a form of payment.
If Axie Infinity is an OPS, it will be required to register with the BSP. An OPS may be cash-in service providers, bills payment service providers, and entities such as payment gateways, platform providers, payment facilitators and merchant acquirers that enable sellers of goods and services to accept payments, in cash or digital form.
“The BSP will also work closely with other regulators under the Financial Sector Forum (FSF) to strengthen cooperative oversight of fintech innovation and to continue to craft adequate regulations covering virtual assets and virtual asset service providers or VASPs (virtual asset service providers),” said Diokno. The FSF is a voluntary inter-regulator coordination body comprised of the BSP, the Securities and Exchange Commission, the Philippine Deposit Insurance Corp. and the Insurance Commission.
Financial regulators are currently probing gaming applications and other social media platforms for its use of financial technology firms or fintechs as they may be required to obtain the necessary authority to conduct fintech-related services.
Fintechs are technology-based companies that deliver financial services. In regulating fintech activities – such as those used by gaming apps for money and social media platforms – the risks attendant to fintech use will be “effectively managed without stifling innovation,” said the BSP.
The BSP’s jurisdiction over cryptocurrency-related activities cover VASPs. While the BSP does not yet see Axie Infinity as a VASP, it said it is actively monitoring the level of merchant acceptance of SLP as a form of payment for goods/services, which may fall within the activities of an OPS.
The BSP’s regulatory framework for VASPs allow end-users to exchange fiat or physical money to crypto assets to acquire non fungible tokes or NFTs for game applications and to convert the same back into fiat currency.