Understanding the Legal Status of Cryptocurrency in the Philippines

Cryptocurrency is legal in the Philippines and is regulated by the Bangko Sentral ng Pilipinas (BSP), the country’s central bank. In 2017, the BSP issued Circular No. 944, which established guidelines for virtual currency exchanges (VCEs). This regulatory framework requires VCEs to register with the BSP and comply with anti-money laundering (AML) and counter-terrorism financing (CTF) obligations. The BSP recognizes cryptocurrencies as digital representations of value that can be used for payment and investment purposes, but they are not considered legal tender. This means that while crypto transactions are permitted, they are not mandatory for merchants to accept. The BSP continues to monitor the evolving landscape of digital assets to ensure financial stability and consumer protection.

In addition to the BSP's oversight, the Securities and Exchange Commission (SEC) of the Philippines plays a crucial role in regulating cryptocurrency-related activities. The SEC focuses on Initial Coin Offerings (ICOs) and other investment schemes involving digital assets. It mandates that any offering of securities using blockchain or distributed ledger technology must comply with existing securities laws. This includes registration requirements and the provision of necessary disclosures to protect investors. The SEC has also issued advisories warning the public against unregistered and potentially fraudulent crypto investment schemes. These measures aim to foster a secure environment for digital asset investments while safeguarding the interests of the investing public.

The BSP recognizes that virtual currency systems have the potential to revolutionize the delivery of financial services, particularly for payments and remittances. However, it is crucial to ensure that these systems are not misused for illicit activities (1).

The Philippine government has also established the Cagayan Economic Zone Authority (CEZA) as a special economic zone to attract fintech and crypto companies. CEZA offers licenses to offshore virtual currency exchanges, allowing them to operate within the zone under specific regulatory conditions. This initiative aims to position the Philippines as a hub for blockchain and cryptocurrency innovation in the region. However, CEZA's regulatory scope is limited to the economic zone, and companies operating outside this zone must comply with national regulations set by the BSP and SEC. This dual regulatory approach seeks to balance innovation with the need for comprehensive oversight..

In conclusion, the Philippines has adopted a proactive stance in regulating cryptocurrencies, recognizing their potential benefits while addressing associated risks. Through the collaborative efforts of the BSP, SEC, and CEZA, the country aims to create a secure and conducive environment for the growth of digital assets. As the global landscape of cryptocurrency continues to evolve, the Philippines remains committed to refining its regulatory frameworks to adapt to emerging challenges and opportunities..

Source:
https://www.bsp.gov.ph/Regulations/Issuances/2017/circular944.pdf
https://www.sec.gov.ph/investors-education-and-information/advisories/

Last updated: 08-05-2025 Disclaimer: This article does not provide legal advice. If you need legal advice, please contact an attorney directly.