Quick Answer
Yes, cryptocurrency is legal but regulated in the Philippines.
- It is not legal tender but is a legal virtual commodity.
- Exchanges must register with government agencies like the BSP and SEC.
Legal Status of Crypto in Philippines
Cryptocurrency is legal in the Philippines, though it operates within a strictly regulated framework and is not considered legal tender. This approach allows the government to encourage financial innovation while implementing safeguards for investor protection and market integrity. Regulatory oversight is handled by key government bodies, primarily the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC). These authorities require crypto service providers to register and comply with specific rules, such as the Virtual Asset Service Provider (VASP) and Crypto Asset Service Provider (CASP) frameworks, to operate legally in the country.
Current Regulations
The regulatory landscape is primarily shaped by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC). The BSP enforces rules for Virtual Asset Service Providers (VASPs) through key circulars, such as Circular No. 944 and the stricter Circular No. 1108, which mandate registration and compliance with anti-money laundering standards. More recently, the SEC introduced its own Crypto Asset Service Provider (CASP) rules, requiring platforms to obtain licenses and meet capital requirements to protect investors. These frameworks collectively ensure that while crypto trading is permitted, it operates under strict government oversight.
Regulatory Authorities
Several key government bodies in the Philippines share the responsibility of overseeing the cryptocurrency landscape.
- Bangko Sentral ng Pilipinas (BSP): The BSP is the country's central bank, responsible for licensing and supervising Virtual Asset Service Providers (VASPs) like crypto exchanges and wallet providers. It enforces compliance with anti-money laundering rules, sets capital requirements, and mandates robust cybersecurity frameworks to protect the financial system.
- Securities and Exchange Commission (SEC): The SEC regulates the offering and sale of crypto assets that are deemed securities and oversees Crypto Asset Service Providers (CASPs). Its focus is on investor protection, requiring registration for platforms and Initial Coin Offerings (ICOs), and setting rules for capital and marketing.
- Anti-Money Laundering Council (AMLC): The AMLC is tasked with implementing the country's Anti-Money Laundering Act, which now includes crypto-related businesses as covered persons. It monitors and investigates suspicious transactions reported by VASPs to prevent the use of digital assets for illicit activities and terrorism financing.
Historical Context
The Philippines' crypto regulation journey began with a simple warning advisory from the BSP in 2014. Formal rules arrived in 2017 with Circular No. 944, which mandated registration for exchanges. The SEC joined the oversight in 2018 by drafting rules for ICOs. A major policy shift occurred in 2021 with BSP Circular No. 1108, introducing the VASP framework and aligning with global anti-money laundering standards. By 2025, the SEC implemented its own CASP rules, solidifying a dual-agency approach. This evolution transformed the landscape from an unregulated space to a structured market focused on investor protection and financial stability.
Compliance Requirements for Businesses in Philippines
- Anti-Money Laundering (AML) and Know-Your-Customer (KYC) Protocols: Crypto service providers are considered remittance and transfer companies under the Anti-Money Laundering Act. This requires them to register with the Anti-Money Laundering Council Secretariat, implement customer identification processes, maintain records, and report suspicious transactions. While not always explicitly termed 'KYC', these BSP guidelines embed core customer due diligence principles. The SEC also mandates that CASPs comply with AML safeguards to prevent illicit financial activities.
- Dual Registration and Licensing: Businesses must navigate a dual-agency registration process. They are required to obtain a Certificate of Registration from the BSP to operate as a remittance and transfer company. Separately, they must register with the SEC as a Crypto Asset Service Provider (CASP), a requirement for both local and foreign platforms serving Filipinos.
- Capital and Operational Requirements: The SEC imposes a significant financial requirement, mandating a minimum paid-up capital of ₱100 million and incorporation as a Philippine entity with a local office. Operationally, the BSP requires firms to implement robust technology risk management, maintain internal control systems, and ensure large payouts (over ₱500,000) are traceable via check or direct bank credit.
- Reporting and Investor Protection: Ongoing compliance involves regular reporting to the BSP, including audited financial statements and quarterly transaction data. To protect investors, the SEC requires CASPs to segregate customer funds from company assets and clearly disclose all investment risks associated with their crypto products and services.
Why this matters for Cross-Border Payments
The Philippines' stringent regulatory framework creates a double-edged sword for cross-border payments, enhancing security while introducing significant operational hurdles. For businesses, navigating the dual-agency oversight of the BSP and SEC, alongside meeting substantial capital requirements, translates into higher compliance costs and prolonged setup times. These pain points can introduce friction into the speed and cost-efficiency benefits of crypto, potentially slowing the adoption of digital assets for international remittances and commerce.
How Lightspark Enables Compliant Crypto-Native Payments
Lightspark offers a global payments infrastructure, the “Money Grid,” designed to simplify real-time, cross-border transactions. Its core products, Lightspark Connect and Grid Switch, provide two distinct on-ramps to this network. Lightspark Connect allows businesses comfortable with Bitcoin to natively access the Lightning Network, handling complex node and liquidity management. Grid Switch, on the other hand, enables regulated institutions to move fiat currencies globally using domestic real-time payment systems, leveraging Bitcoin as a neutral settlement asset without direct handling.
These tools directly address the friction caused by the Philippines' dual-agency regulations. By offering features like built-in compliance screening and audit-ready reporting, Lightspark facilitates adherence to BSP and SEC rules without forcing institutions to build the entire compliance stack from scratch. This allows them to leverage the speed and low cost of crypto-native payments while navigating the complex regulatory landscape, turning a potential hurdle into a streamlined process for expanding into new payment corridors.
To learn more about how Lightspark can help streamline cross-border payments, visit the official website.
Notice: This article is provided for informational purposes only and does not constitute legal advice.
FAQs
How is cryptocurrency taxed in the Philippines?
Gains from cryptocurrency transactions are generally subject to income tax, as they are considered a form of property. You should consult with a tax professional to ensure you are accurately reporting your crypto-related income and complying with Bureau of Internal Revenue (BIR) regulations.
Can I use cryptocurrency to pay for goods and services in the Philippines?
While not illegal, using crypto for daily purchases is not common because it is not recognized as legal tender, meaning businesses are not required to accept it. Any such transactions are treated as barter, which can create tax complexities for both the buyer and the seller.
What are the penalties for operating an unregistered crypto exchange in the Philippines?
Operating without the required licenses from the BSP and SEC can lead to severe penalties, including substantial fines and potential criminal charges for the operators. These measures are in place to protect investors and maintain the stability of the financial system.
Sources
- Adonis, Meg J. “SEC: Crypto Trading Still Allowed in the Philippines.” Philippine Daily Inquirer, 19 Aug. 2025, business.inquirer.net/541900/sec-crypto-trading-still-allowed-in-ph.
- Aureada, Yasser. “SEC Tightens Rules on Crypto Asset Service Providers in the Philippines.” Aureada CPA Law Firm, 2025, www.aureadalaw.com/post/sec-tightens-rules-on-crypto-asset-service-providers-in-the-philippines.
- Bangko Sentral ng Pilipinas. “Guidelines for Virtual Currency (VC) Exchanges.” Bangko Sentral ng Pilipinas, Circular No. 944, Series of 2017, 6 Feb. 2017, www.bsp.gov.ph/Regulations/Issuances/2017/c944.pdf.
- Bangko Sentral ng Pilipinas. “Warning Advisory on Virtual Currencies.” Anti-Money Laundering Council, 6 Mar. 2014, www.amlc.gov.ph/2015-12-09-07-34-10/2015-12-14-04-11-34/request-for-amla-training/2-uncategorised/60-warning-advisory-on-virtual-currencies.
- “Cryptocurrency Regulations in the Philippines.” Sanction Scanner, 12 Aug. 2025, www.sanctionscanner.com/blog/cryptocurrency-regulations-in-the-philippines-1140.
- “Philippines and Cryptocurrency | Blockchain and Cryptocurrency Regulations.” Freeman Law, freemanlaw.com/cryptocurrency/philippines/.
- Tiu, Michael Angelo T. “Basic Information and Regulation of Cryptocurrency in the Philippines and Other Association of the Southeast Asian Nations Member States.” NTRC Tax Research Journal, vol. XXXIV, no. 6, Nov.-Dec. 2022, www.ntrc.gov.ph/images/journal/2022/j20221112a3.pdf.
