Philippines Central Bank Cracks Down on Privacy Coins With Tough New Crypto Listing Rules

Key Takeaways:

• The Philippines’ central bank has issued an order to forbid the listing of private activity tokens on licensed crypto platforms.
• New regulations will mandate that VASPs thoroughly evaluate digital assets according to six strict due diligence criteria before listing.
• Exchanges need to conduct ongoing assets research and remove tokens which are not compliant, lack liquidity or security.

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The government in the Philippines is cracking down on the crypto industry. The Bangko Sentral ng Pilipinas (BSP) issued a new memorandum that makes it harder for listings in tokens, but is also banning any privacy-enhancing cryptocurrencies from licensed trading platforms.

The move reflects a greater regulatory thrust to transparency, consumer protection and risk management as crypto use continues to expand in Southeast Asia.

All licensed Virtual Asset Service Providers (VASPs) will be required to have an elaborate due diligence system in place before listing any coin or token to trade it on their exchange. The BSP has identified six broad areas of evaluation that exchanges should take into account:

• Issuer background
• Market maturity
• Use cases
• Transparency, traceability, and security
• Redemption, liquidity, and reserves
• Legal and compliance standards

The framework calls for exchanges to gather a raft of details on token issuers: their ownership, finances, development teams, conflicts of interest, and their regulation status.

However, other market-related parameters like capitalization, trading volumes, exchanges’ support and on-chain holders count require a checkup before a token can be eligible for listing.

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The BSP’s explicit prohibition on anonymity-enhancing virtual assets is one of the most important aspects of the memorandum.

The central bank said privacy-based cryptocurrencies will not be listed and supported by licensed VASPs in India.

Emphasis is being given to some of the changes regarding stablecoins and other virtual assets backed by an asset.

VASPs might need to review the issuance, redemption, minting and burning of these tokens. They need to assess reserves composition, liquidity support, thresholds of stabilization and capacity of any issuers to satisfy redemption needs.

Transparency is an absolute must on the part of BSP. It should also be expected that backers will have assets that can maintain the value of a dapp and thus keep market confidence.

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The memorandum is not limited to initial listings. The name-plated assets in licensed exchanges are continuously monitored and the thresholds set up may result in a suspension, or delisting, from the exchange.

Tokens can be pulled if there’s significant liquidity degradation, inadequate reserves, regulatory issues, cybersecurity threats, false disclosures, solution insolvency or unusual marketplace actions. The BSP said listing standards are not a one-off affair.

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