Cryptocurrency Laws in the Philippines: Legal Guide for Filipino Crypto Investors
- The Master Sensei
- Oct 27
- 7 min read
The Philippines has set out clear rules for using and trading cryptocurrency. Crypto’s legal here, but both businesses and users have to play by the regulations set by the central bank and other government agencies. The country’s approach tries to balance innovation with consumer protection and crime prevention.
If you run a crypto exchange or digital wallet in the Philippines, you’ve got to register with the Bangko Sentral ng Pilipinas (BSP). These companies follow strict anti-money laundering (AML) rules and have to warn users about the risks. The government also taxes crypto trading profits under the usual income tax laws.
The Philippines is aiming to lead the way in blockchain tech in Southeast Asia. Officials keep updating the rules as the crypto world evolves. If you’re an investor, business, or just interested, knowing these laws helps you stay on the right side while diving into the digital economy.
Key Takeaways
You can legally trade and own cryptocurrency in the Philippines, as long as you stick to government rules
Every crypto business has to register with the central bank and follow AML laws
Profits from crypto investments get taxed just like other income
Core Legal and Regulatory Framework for Cryptocurrency
The Philippines uses a pretty thorough regulatory system for crypto, involving several government agencies. The Bangko Sentral ng Pilipinas and the Securities and Exchange Commission (SEC) share the job, and AML laws set the foundation.
Defining Cryptocurrency and Virtual Assets in Philippine Law
There’s no single law in the Philippines that spells out what cryptocurrency is. Instead, different agencies use their own terms in various circulars and memos.
The Bangko Sentral ng Pilipinas calls digital assets “virtual currencies.” These are digital representations of value that people can trade electronically.
The Securities and Exchange Commission uses “crypto assets” for digital tokens that might count as securities—like coins or tokens from ICOs.
Key features under Philippine rules:
Exists in digital or virtual form
Tradable and transferable online
Can be used as a medium of exchange
Not issued by any government
Regulators focus more on the service providers—like exchanges and trading platforms—than on the crypto itself. They don’t ban specific digital assets; they regulate the companies around them.
Sometimes different agencies see the same token in different ways. For example, a token might be a virtual currency under BSP but a security under SEC rules.
Role of Bangko Sentral ng Pilipinas (BSP) in Regulating VASPs
The BSP acts as the main regulator for Virtual Asset Service Providers (VASPs). BSP rolled out formal crypto rules in 2017 through its circulars.
BSP Circular No. 1108 made registration tougher for crypto exchanges. Every VASP must register with BSP before starting up in the Philippines.
To register, VASPs need:
At least ₱100 million in paid-up capital
A physical office in the Philippines
A qualified management team
Solid risk management systems
VASPs have to stick to strict operational standards—customer protection, cybersecurity, and regular reports to BSP.
BSP Memorandum No. M-2022-035 added more compliance hoops. VASPs must do extra due diligence for high-risk transactions.
The travel rule kicks in for crypto transfers above ₱50,000. VASPs have to collect info about both the sender and recipient, so authorities can track big transfers.
BSP checks up on VASPs regularly. If a company doesn’t comply, BSP can fine them or even pull their license.
Securities and Exchange Commission (SEC) Oversight and CASP Rules
The SEC regulates Crypto Asset Service Providers (CASPs) through Memorandum Circulars 4 and 5, effective June 12, 2025.
CASPs have to:
Register and get licensed by the SEC
Have at least ₱100 million in capital
Incorporate physically in the Philippines
Submit detailed business docs
CASPs need to turn in all paperwork 30 days before they start operating. This covers business rules, risk controls, and customer disclosures.
The SEC zeroes in on consumer protection and keeping markets fair. CASPs have to follow strict marketing rules and give customers clear risk warnings.
CASPs must report to the SEC regularly. If there are big changes or rule violations, they have to update the commission.
Sometimes, a company needs licenses from both the SEC and BSP, depending on what they offer.
Penalties for breaking the rules can range from ₱10,000 to ₱50,000. Serious cases might even lead to criminal charges or business closure.
Anti-Money Laundering Act and Compliance Requirements
The Anti-Money Laundering Act covers all crypto service providers in the Philippines. VASPs and CASPs must stick to detailed AML requirements.
Main AML steps:
Identify and verify customers
Monitor and report transactions
Keep records for five years
Train staff on AML rules
Providers must report suspicious transactions to the Anti-Money Laundering Council, especially weird trading patterns or dealings with sanctioned groups.
Know Your Customer rules mean companies have to check IDs and addresses before letting people open accounts.
Automated monitoring systems flag possible laundering activities. These systems watch for odd patterns across accounts.
International transfers get extra scrutiny. Providers have to check where the money’s coming from for cross-border crypto moves.
Regular AML audits keep companies on their toes. If they can’t prove they’re following the rules, they risk losing their license.
Key Policies: Taxation, Licensing, and Consumer Protection
The country has set out clear rules for crypto taxes (via the Bureau of Internal Revenue), licensing for exchanges, and standards for new digital assets. BSP-licensed platforms stick to tight AML rules, and crypto investors face straightforward tax obligations.
Bureau of Internal Revenue (BIR) Guidelines on Crypto Taxation
The BIR treats crypto transactions as taxable income. Investors have to report crypto gains on their tax returns.
Capital gains tax can hit up to 15%, depending on the deal and how long you held the crypto.
For the BIR, crypto can count as ordinary assets or capital assets. If you’re an active trader, you might even owe value-added tax (VAT) on your trades.
Long-term holders pay ordinary income tax on their gains. All crypto income—from sales, trades, or payments—gets included in your taxable income.
Licensing Requirements for Crypto Businesses and Platforms
The BSP makes every Virtual Asset Service Provider (VASPs) get a license before doing business in the Philippines. This covers big names like Coins.ph and PDAX.
Licensed platforms have to use strong AML and anti-terrorism measures. They verify customer identities and report anything suspicious.
Key requirements:
Register and get BSP approval
Meet minimum capital rules
Set up risk management systems
File regular compliance reports
Put customer protection measures in place
If you’re licensed, you can legally offer crypto trading, exchange, and wallet services. If not, you risk fines or being shut down.
Compliance for ICOs, DeFi, and NFTs
The SEC treats initial coin offerings (ICOs) as securities. Companies must register with the SEC before launching any ICO.
DeFi platforms that offer financial services have to follow banking and securities laws. If a DeFi protocol handles payments, BSP steps in.
NFT rules depend on what you’re doing. If you’re dealing with art NFTs, you might dodge securities regulation. But utility or investment NFTs? The SEC wants a look.
Digital financial products have to meet consumer protection standards. The SEC keeps an eye out for fraud and unauthorized offerings.
Legal Activities, Enforcement, and Penalties
You can legally trade crypto on licensed platforms, hold it as an investment, or use it for payments. Licensed exchanges like PDAX operate within the approved system.
But you can’t:
Run an unlicensed exchange
Launder money with crypto
Offer unregistered securities
Dodge taxes on crypto gains
BSP and SEC both actively enforce the rules. Break them, and you could face fines, criminal charges, or get your platform shut down.
AML violations are serious—imprisonment is possible. The government watches crypto transactions for suspicious or illegal activity.
Frequently Asked Questions (FAQs)
The BSP and SEC have set up clear frameworks for crypto trading, taxes, and licensing. These rules cover AML, business compliance, and digital asset guidelines.
What regulations apply to the trading of cryptocurrencies in the Philippines?
BSP Circular No. 944 (2017) recognized crypto as a valid payment method and set the first rules for exchanges.
In 2021, BSP rolled out detailed Guidelines for Virtual Asset Service Providers (VASPs), spelling out what exchanges have to do.
The SEC put out a 2018 advisory warning investors about crypto risks. Any company dealing in crypto must register with the SEC and follow securities rules.
All crypto trading platforms must stick to AML and counter-terrorism financing (CTF) regulations—whether they’re local or serving Filipinos from abroad.
How does the Philippine government classify cryptocurrencies for taxation purposes?
The BIR treats crypto gains as taxable income. Capital gains tax can go up to 15%.
Classification depends on how you use crypto. If you’re trading regularly as a business, it’s inventory. If you’re holding for long-term gains, it’s an intangible asset, and you pay ordinary income tax.
VAT might apply if you’re trading crypto as part of your business. All crypto income must be reported on your annual tax return.
Are there specific licensing requirements for cryptocurrency exchanges operating in the Philippines?
Definitely. BSP makes all VASPs get a license first. The 2021 VASP Guidelines set out the details.
Exchanges have to send in detailed applications to BSP—financial info, operations, compliance plans, the works.
Licensed VASPs must meet minimum capital requirements and set up strong internal controls and risk management.
BSP checks in on licensed exchanges regularly. If you break the rules, they can suspend or cancel your license.
What measures have the Philippine authorities implemented to prevent money laundering through cryptocurrency?
BSP requires all exchanges to run solid AML and CTF programs. That means customer ID checks and transaction monitoring.
VASPs have to report suspicious transactions to the Anti-Money Laundering Council (AMLC). They keep detailed records of all customer and transaction info.
KYC checks are a must for every crypto provider. Exchanges verify IDs and keep customer info up to date.
BSP examines exchanges for compliance. If you violate AML rules, you could face big penalties or lose your license.
What are the legal implications of using cryptocurrencies for businesses in the Philippines?
Businesses using crypto have to register with the right agencies. If you’re involved in crypto, you need SEC registration and have to follow securities laws.
Crypto transactions count as taxable events—businesses must keep good records and include crypto gains in their tax filings.
If you’re using crypto in your business, you’ve got to follow BSP guidelines. Make sure your crypto service providers are licensed.
Companies offering crypto services to the public face extra rules—consumer protection laws and disclosure requirements apply.
Has the Philippine Central Bank issued any guidelines on initial coin offerings (ICOs)?
In the Philippines, the SEC—not the BSP—takes the lead on ICOs. The SEC usually treats most ICO tokens as securities, so they fall under registration rules.
If you're planning to run an ICO, you'll need to register your token offering with the SEC. That means submitting detailed disclosures and sticking to investor protection guidelines.
The SEC has put out several warnings about unregistered ICOs and the risks they bring. Honestly, it's smart to check if an ICO project has proper SEC registration before jumping in.
ICO issuers have to play by the same rules as anyone offering traditional securities, including regular financial reporting and ongoing disclosure.
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