FINANCIAL institutions who are not under the supervision of the Bangko Sentral ng Pilipinas (BSP) and that wish to function as virtual asset service providers (VASP) have only until the end of this month to submit an application, the regulator announced on Friday.

The central bank said in a statement that this came about after its policymaking Monetary Board approved a modified approach to the grant of VASP license in line with the BSP’s mission to uphold the integrity and stability of the financial system and increase consumer confidence in the digital ecosystem.

Any organization that provides services or engages in activities that provide a facility for the transfer or exchange of virtual assets is a VASP, according to the Bangko Sentral.

In the meantime, it said a virtual asset is any sort of digital asset that may be traded or transferred digitally and utilized for investment or payment reasons.

The central bank said the modified approach comprised restricting the issuance of new VASP licenses to already-existing BSP supervised financial institutions (BSFIs) and closing the regular application window for new VASP licenses for a period of three years.

It was emphasized that the amended process would still allow existing BSFIs with good risk management systems, including suitable client suitability assessment and customer onboarding practices, and awareness programs to seek for a VASP license.

Applications that were submitted to Bangko Sentral by nonBSFIs and completed or passed Stage 2 of the licensing procedure on or before Aug. 31, 2022 will be examined and evaluated based on Stage 3 standards for completeness and sufficiency of documentation and information.

Applications with incomplete requirements as of August 31 this year will be returned and treated as closed. The central bank said beginning Sept. 1, 2022, it will no longer consider or accept new applications.

The BSP said it would continue to step up its monitoring of changes in the digital space, improve current monitoring capacities over the landscape of digital threats and broaden consumer education campaigns on the risks of owning virtual assets.

“Recent market developments have necessitated the adoption of a modified VASP licensing approach, which strategically shifts the focus to assessing the existing Bangko Sentral-registered VASPs’ overall performance and risk management systems, their impact on financial services and financial inclusion agenda, and their contribution toward the achievement of the Digital Payments Transformation Roadmap objectives,” BSP Governor Felipe Medalla was quoted as saying.

“The Bangko Sentral remains supportive and proactive in responding to the developments in the digital financial ecosystem,” he added.