The Philippines has one of the most active crypto user bases in the world. According to the Chainalysis 2025 Global Crypto Adoption Index, the country ranks 9th globally in grassroots cryptocurrency adoption, a position built not on institutional trading volumes but on remittance corridors, retail participation, and the remnants of the play-to-earn ecosystem that briefly made the Philippines the most talked-about crypto market on the planet (Chainalysis, 2025). At its peak in 2022, the country ranked 2nd globally, driven almost entirely by user-level adoption rather than capital-market activity (BitPinas, 2024).

That context matters when evaluating regulation. Crypto in the Philippines is not primarily a wealth-management story. It is a financial-access story, and the regulatory framework governing it has significant consequences for millions of Filipinos who use digital assets as a practical financial tool, not a speculative one.

Against that backdrop, 2025 has delivered the most consequential regulatory development in the country's crypto history. The question for practitioners, founders, and compliance professionals is not just what the new rules say, but whether they are sufficient, coherent, and enforceable. This article addresses the first question. Parts 2 and 3 will address the rest.

What Just Happened: The SEC CASP Rules

On May 30, 2025, the Securities and Exchange Commission issued two instruments that together constitute the country's first comprehensive crypto-asset regulatory framework: SEC Memorandum Circular No. 04, Series of 2025 (the "CASP Rules") and SEC Memorandum Circular No. 05, Series of 2025 (the "CASP Guidelines"). The rules took effect on July 5, 2025, followed by an SEC advisory on August 14, 2025 reaffirming that all platforms serving Filipino users must be properly licensed before operating (Aurea Da Law, 2025).

The stated purpose is clear. As noted by SEC Assistant Director Atty. Paolo Ong at Philippine Blockchain Week 2025, the rules were issued "to support local players and go after those unregistered ones," adding that they "will give more teeth to our enforcement team" in pursuing platforms operating without authorization (CoinGeek, 2025).

The key requirements are as follows.

Registration and capital. All crypto-asset service providers must be registered as stock corporations with the SEC, with a minimum paid-up capital of PHP 100 million in cash or property, excluding crypto-assets. Applicants must maintain a physical office in the Philippines and submit extensive documentation to the SEC's PhiliFintech Innovation Office (Quisumbing Torres via Lexology, 2025).

Fund segregation. The CASP Guidelines require strict separation of customer funds from exchange funds. As Atty. Ong noted, this requirement was drawn directly from lessons learned in the collapse of global digital asset exchanges, where commingled funds resulted in catastrophic losses for retail users (CoinGeek, 2025).

Disclosure requirements. A disclosure document covering the offeror's identity, the crypto-asset's key features and risks, underlying technology, and applicable rights must be filed with the SEC and published at least 30 days before any marketing activities or the actual offering, whichever comes first (Quisumbing Torres via Lexology, 2025).

Marketing restrictions. Only registered entities may engage in the marketing or promotion of crypto-assets and crypto-asset services. Influencers and third-party marketers must work exclusively with registered CASPs and must themselves be incorporated in the Philippines (BitPinas, 2025).

Penalties. Willful violations carry imprisonment of one to five years, fines of PHP 50,000 to PHP 2 million, or both. Repeated violations of the CASP Guidelines can result in cancellation of registration (Quisumbing Torres via Lexology, 2025).

The BSP Side: Circular 1108 and the Licensing Freeze

The SEC CASP Rules did not emerge in a vacuum. The Bangko Sentral ng Pilipinas has maintained its own regulatory framework for virtual asset service providers since January 21, 2021, when it issued BSP Circular No. 1108, replacing earlier rules under Circular No. 944 (Digital Policy Alert, 2021). Circular 1108 established the VASP licensing framework, requiring entities engaged in virtual asset transfers and exchanges to obtain a Certificate of Authority to operate as a money service business, and setting minimum capital and AML/CFT obligations in line with the Financial Action Task Force's Recommendation 15.

In December 2023, the BSP issued Memorandum M-2023-042 to expand Circular 1108, clarifying transaction thresholds and the applicability of the Travel Rule for virtual asset transfers above PHP 50,000 (Coins.ph, 2023).

The more consequential development, however, is what the BSP has chosen not to do. In August 2022, the BSP imposed a moratorium on new VASP license applications, citing heightened market risks. That moratorium was extended indefinitely via a BSP Memorandum dated August 20, 2025, citing continuing concerns over consumer protection and rising cybercrime (BitPinas, 2025). As of May 2025, only nine entities hold active BSP VASP licenses, including Coins.ph, Maya Philippines, PDAX, and UnionBank of the Philippines (CoinGeek, 2025).

The timing of the indefinite extension is notable. It came several months after the Philippines was removed from the FATF grey list on February 21, 2025, following nearly four years of increased monitoring that began with the country's re-inclusion in June 2021 (IBON Foundation, 2025). Rather than treating the grey list exit as an opportunity to open the market, the BSP used it as a moment to consolidate oversight. The central bank's statement was direct: "Close monitoring of VASPs is necessary to ensure they operate in full compliance with regulations and international standards" (Philippine Star, 2025).

For practitioners, the practical implication is significant. Any entity seeking to enter the Philippine VASP market as a new licensee faces an indefinite wait, regardless of readiness or capitalization.

The Problem the Rules Have Not Yet Solved

The CASP Rules represent genuine regulatory progress. The fund segregation requirement alone addresses one of the most common vectors of retail harm in crypto exchange collapses. The disclosure requirements bring Philippine standards closer to what MiCA imposes in the EU. These are not cosmetic changes.

But the rules have created a structural complication that both agencies are currently navigating without a published resolution: the dual-licensing requirement.

BSP Circular 1108 is explicit that the offering and sale of virtual assets falls under SEC jurisdiction under the Securities Regulation Code (Republic Act No. 8799), while payment and transfer services fall under BSP authority (Lexology, 2021). The CASP Rules now confirm this in practice: firms must obtain licenses from both the SEC as a CASP and the BSP as a VASP, two separate frameworks with separate capital requirements and separate compliance obligations (BitPinas, 2025).

For a token that functions simultaneously as a payment instrument and an investment product, which describes most actively traded assets on Philippine exchanges, the question of which agency has primary jurisdiction over a specific activity is not hypothetical. It is a daily compliance decision that practitioners currently make without binding guidance.

There is no published joint circular between the SEC and BSP that resolves classification conflicts. There is no inter-agency taxonomy. There is no conflict resolution protocol. Both agencies are operating in good faith within their own mandates, but the gap between those mandates is where regulatory uncertainty lives.

What This Means for Practitioners Right Now

For entities currently operating in the Philippine crypto market, or planning to enter it, the immediate compliance picture is as follows.

Existing platforms must assess whether their activities fall within the SEC's definition of crypto-asset services under the CASP Rules. If they do, SEC registration and the PHP 100 million capitalization requirement apply, regardless of existing BSP VASP status. The two licenses are separate and cumulative, not interchangeable.

Marketing activities must be reviewed immediately. The restriction of promotional activity to registered entities is already in effect, and the SEC has signaled active enforcement intent. Operating a Telegram community, social media account, or affiliate program without registration is a potential violation under the CASP Guidelines.

New entrants face the most difficult position. SEC registration is available, but BSP VASP licensing remains frozen indefinitely. A platform that obtains SEC CASP registration but cannot obtain a BSP VASP license is authorized to issue and market crypto-assets under SEC rules but cannot legally operate as a money service business for transfers and exchanges under BSP rules. The gap between those two authorizations is legally unresolved.

Conclusion: A Framework in Progress

The CASP Rules are the most significant step the Philippine SEC has taken in the digital asset space. They establish a real legal foundation where a grey area existed before, and they reflect lessons learned from both international exchange collapses and domestic consumer harm. For that, the SEC deserves credit.

But a regulatory framework is not the same as a regulatory system. The Philippines now has two agencies issuing meaningful instruments in parallel, with overlapping jurisdiction over the same assets, and no published mechanism for resolving the conflicts that overlap creates.

That structural gap is not a minor administrative issue. It is the central challenge of Philippine crypto regulation in 2026, and it has direct consequences for every VASP, CASP, and digital asset user in the country.

Part 2 of this series examines where that gap has already produced real harm, using the most important case study the Philippines has generated so far: the rise and collapse of the play-to-earn economy, and what regulators did, and did not do, while millions of Filipinos treated blockchain games as their primary source of income.

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