Philippines Central Bank Proposes Year-Long Freeze on Payment Licenses

Under the draft circular, the central bank would stop processing new applications to operate payment systems, though existing firms would continue their operations uninterrupted. While applications submitted before the freeze could remain in the evaluation pipeline, the regulator would withhold final approval or denial until the moratorium expires. Applicants would also be barred from commencing operations requiring registration during this period without specific authorization.

Simultaneously, the regulator is targeting the integration of virtual asset service providers into the national payment infrastructure. Financial institutions providing merchant acquisition services would be required to establish direct contractual relationships with these providers, effectively banning the layered payment structures currently used to connect crypto platforms to local channels. This shift mandates enhanced due diligence and gives institutions the authority to impose strict transaction and settlement limits based on internal risk assessments. Institutions will have one year to identify and restructure existing arrangements to comply with these requirements, as the BSP looks to consolidate merchant data through a centralized national QR code database.