Modified Approach in the Grant of VASP Licenses

BANGKO SENTRAL NG PILIPINAS OFFICE OF THE COVERNOR M EMORAN DU M NO. M-2O22.O35 To : All Applicants for an Authority to Operate as a Virtual Asset Service Provider (VASP) Subject : Modified Approach in the Grant of VASP Licenses The Monetary Board, in its Resolution No.'l'l4l dated O4 August 2022, approved a modified approach in the grant of new Virtual Asset Service Provider (VASP) licenses. The Bangko Sentral aims to strike a balance between promoting innovation in the financial sector and ensuring that associated risks remain within manageable levels. In this light, the Bangko Sentral recognizes that as VAs offer opportunities to promote greater access to financial services at reduced costs, they also pose varied risks that may undermine fi nancial stability. In this regard, the regular application window for new VASP licenses shall be cfosed for three (3)years, starting OI September2o.22, subject to re-assessment based on market developments. Applications that have completed/passed Stage 2 of the licensing process on or before 3l August 2022will be processed and assessed for completeness and sufficiency of documentationlnformation submitted, as well as compliance with the licensing criteria to operate as a VASP hased on Stage 3 requirements. Applications with incomplete requirements as of 3l August2022 will be returned and tagged as "closed". The Bangko Sentralwill no longer process these applications further. Meanwhile, existing BSP Supervised Financial Institutions (BSFls) who wish to expand operations by offering VASP services, including non-custodial VASPs who wish to offer safekeeping and/or custodial services, may still apply for a VASP license provided that they have a Supervisory Assessment Framework (SAFr) composite rating of at least "stable'r. Due consideration shall be given to the BSFI's risk management systems including its client suitability assessment and onboarding processes, as well as financial consumer education and awareness programs in the evaluation of its application. For guidance and implementation. G. FONACIER l0 August?.O2} rln lieu of the SAFr composite rating, the CAMELS composite rating of at least 3'shall be used. lf neither a SAFr nor CAMELS rating is available, any equivalent assessment that satisfies the descriptive criteria of SAFr composite rating 3 - Stable' may be used. Page I ofl