The Bangko Sentral ng Pilipinas (BSP) will increase reporting requirements for virtual asset service providers (VASPs) to improve data gathering and oversight of these entities.
The BSP refers to virtual currencies as virtual assets. While virtual currencies are digital units used as a medium of exchange or for storing value, virtual assets encompass a broader range of functions, including digital trading, transfer, and use for payment or investment, according to the BSP.
The BSP has drafted a circular updating the reporting and notification requirements for VASPs. These amendments aim to address data gaps, reduce information asymmetries, enhance data gathering efficiency, and improve the quality of information about virtual assets and VASPs.
The proposed circular was released over the weekend, with VASPs given until Dec. 13 to submit feedback.
Under the draft circular, VASPs will be required to submit 13 reports with varying frequencies: monthly, quarterly, semi-annually, and annually. Two reports, detailing the volume and value of virtual asset transactions and the total virtual assets held by custodians, will be submitted monthly. Seven reports are due quarterly, three semi-annually, and the audited financial statement annually.
A new reporting portal for all VASPs will be implemented by Jan. 1, 2025.
The BSP continues to caution the public against transacting with unregistered VASPs, particularly those based abroad. As of Oct. 1, 2024, only 14 VASPs are registered with the BSP, with only seven currently active.
These seven VASPs are: Maya Philippines; Philippine Digital Asset Exchange or PDAX; Betur Inc. or COINS PH; Bloomsolutions Inc.; Direct Agent 5 or SurgePay Mobile App; Moneybees Forex Corp.; and TopJuan Technologies Corp.
Since August 2022, the BSP has emphasized that it cannot provide legal recourse or consumer protection for transactions with foreign-based VASPs.
The BSP also added the high-risk nature of virtual asset dealings, which can result in financial losses due to price volatility. Consumers are encouraged to verify with the BSP whether a virtual asset firm is supervised and regulated.
Furthermore, a Dec. 7, 2022 memo instructed all registered VASPs to limit their activities to the safekeeping of assets. A three-year ban on new VASP licenses was imposed on Sept. 1, 2022, due to persistent threats in the virtual asset landscape that could compromise customer funds.
BSP Deputy Governor Chuchi G. Fonacier said that VASPs, especially custodians, must ensure that customer assets are used solely for safekeeping. VASPs facilitate the conversion or exchange of fiat currency to virtual assets and vice versa.