On January 26, 2021, The Bangko Sentral ng Pilipinas BSP released new guidelines on virtual asset service providers (VASPs) operating in the Philippines. The guidelines are based on Financial Action Task Force standards and require VASPs to implement anti-money laundering measures and to report suspicious transactions. The guidelines also require VASPs to implement customer due diligence measures, including collecting customer identification data, transaction monitoring, and record-keeping.
1. Is cryptocurrency legal in the Philippines?
Yes. Virtual currencies are legal. However, the BSP does not recognize bitcoin and other “virtual currencies” as currency.
2. Are there any AML crypto regulations in the Philippines?
Yes. On January 26, 2021, the Bangko Sentral’s Guidelines for VASPs introduced anti-money laundering standards for VASPs.
3. Is the Crypto Travel Rule mandated in the Philippines?
Yes. Page 5 of Bangko Sentral’s Guidelines for VASPs states:
For VA transfers amounting to P50,000.00 or more, or its equivalent in foreign currency, the originating institution in a VA transfer must obtain and hold the required and accurate originator information as well as the required beneficiary information, and transmit said information to the beneficiary institution. Beneficiary institutions must obtain and hold required originator information as well as required and accurate beneficiary information.
4. Who regulates cryptocurrency in The Philippines?
The Central Bank of the Philippines (Bangko Sentral ng Pilipinas) regulated cryptocurrency exchanges registered in The Philippines under Circular 944. The Bangko Sentral ensures that virtual assets (VA) systems are not used for money laundering, terrorist financing, and proliferation financing activities.
PDAX goes live with Travel Rule compliance with crypto regulatory solutions provider Notabene
FATF Travel Rule requirements in the Philippines
1. Is The Philippines a FATF or FSRB member?
The Philippines joined the Asia-Pacific Group (APG) in July 2021, making the country an FSRB member.
2. Are there licensing or registration requirements for VASPs in the Philippines?
Yes. VASPs registered in The Philippines must secure a “Certificate of Authority” to operate as a Money Service Business.
Section 3 of Bangko Sentral’s Guidelines for VASPs:
Bangko Sentral-registered Virtual Currency Exchanges, as well as VASPs currently operating without Bangko Sentral approval, shall apply for a Certificate of Authority not later than three (3) months from the effectivity of this Circular. Upon submission of the application, said entities may continue to operate their business unless instructed otherwise.
A VASP shall also adhere to the registration procedures under Appendix N-7 and submit the Application for Registration and Notarized Deeds of Undertaking (Appendices N-8 and N-9) to the Bangko Sentral through the appropriate supervising department of the Bangko Sentral.
3. When does the Crypto Travel Rule go into effect in the Philippines?
February 5, 2021. Section 4 of the Bangko Sentral’s Guidelines for VASPs stipulated the applicable requirements would go into effect 15 days after it was published on January 26, 2021.
4. Does The Philippines permit a grace period to comply with the Crypto Travel Rule?
Yes. The guideline gave VASPs a six-month grace period from the effectivity of Bangko Sentral’s Guidelines for VASPs: Circular1108. That grace period ended on August 5, 2021.
Complying with the FATF Crypto Travel Rule in the Philippines
1. What is the minimum threshold for the Crypto Travel Rule in the Philippines?
The minimum threshold that triggers the crypto Travel Rule in the Philippines is P50,000.00 or more or its equivalent in foreign currency.
2. What personally identifiable information is required to be shared for the Crypto Travel Rule in the Philippines?
Information on the Originator Customer:
- Name (r.e., the sending customer);
- Account number that was used to process the transaction (e.g., the virtual asset wallet);
Plus one of the following:
- Physical (geographical) address, or
- National identity number, or
- Identification number (r.e., not a transaction number) that uniquely identifies the originator to the ordering institution; or
- Date and place of birth;
Information on the Beneficiary Customer:
- Name (r.e., the sending customer);
- Account number used to process the transaction (e.g., the virtual asset wallet);
3. Are there differences in requirements for customer PII for cross-border transfers vs. within the Philippines?
No. Page 6 of Bangko Sentral’s Guidelines for VASPs states that VASPs and other BSFIs that engage in or facilitate VA transfers shall consider all VA transfer transactions as cross-border wire transfers and comply with the applicable Travel Rule requirements.
Why choose Notabene for Crypto Travel Rule Compliance in the Philippines?
Notabene offers a full-service Travel Rule compliance solution that helps businesses manage counterparty risks and comply with the crypto Travel Rule. The solution includes a VASP Network, robust APIs, a compliance dashboard, integrations with blockchain analytics and sanctions screening tools, and a customizable user interface. Clients can easily upload and share their due diligence information 1:1 between parties, ensuring that they engage with authorized and licensed VASPs as required by specifically detailed by the BSP on page 6 of its Guidelines for VASPs.
Click here to learn more about VASP Due Diligence at Notabene.