BSP flags crypto anonymity risks, backs strict oversight

The Bangko Sentral ng Pilipinas (BSP) is advocating for stringent oversight of cryptocurrency transactions in the Philippines, warning that unregulated transfers could make it challenging to identify those involved. BSP Governor Eli Remolona Jr. emphasized during an interview with Bankero Unfiltered that regulating virtual asset transactions is crucial.

He stated that virtual asset service providers (VASPs), which oversee digital asset exchanges, transfers, and storage, must comply with know-your-customer (KYC) rules. These rules demand that financial institutions verify customer identities to assist authorities in detecting suspicious activities. Remolona explained that cryptocurrencies can be stored in individual wallets, making it difficult to trace transactions back to the individuals involved.

This lack of traceability poses significant risks, including fraud and cybercrime. The BSP aims to mitigate these risks by ensuring all crypto transactions occur through regulated VASPs, thereby maintaining a level of traceability. Remolona acknowledged that there have likely been crypto-related scams in the Philippines, though they might not be as extensive as those in other countries.

The central bank has imposed a moratorium on issuing new VASP licenses since September 2025, citing ongoing concerns over consumer protection and rising cybercrime risks. This stance aligns with a broader regulatory framework being developed by the Securities and Exchange Commission (SEC). The SEC barred Binance from operating in the Philippines in 2024 for offering investment services without proper registration.

Recently, Binance partnered with BlockShoals Technologies Inc., a firm approved under the SEC’s Strategic Sandbox. While regulators are exploring avenues for financial innovation, they remain committed to ensuring traceability and customer identification in virtual asset transactions.