Crypto License in Philippines

Introduction: Crypto Licensing in the Philippines

The Philippines has rapidly positioned itself as one of the most crypto-friendly countries in Asia, attracting blockchain startups, crypto exchanges, and Web3 companies from across the globe. Thanks to clear regulatory frameworks, a proactive central bank, and dedicated economic zones like CEZA (Cagayan Economic Zone Authority), it’s now possible to legally operate a cryptocurrency business in the Philippines by obtaining the proper crypto license.

Whether you’re looking to launch a virtual asset exchange, a digital wallet, or provide DeFi and blockchain services, understanding how to get licensed is essential for growth and compliance. This comprehensive guide explores the two main crypto licenses in the country — issued by Bangko Sentral ng Pilipinas (BSP) and CEZA — and explains how to apply, the benefits, legal responsibilities, and potential risks.

Types of Crypto Licenses in the Philippines

Cryptocurrency operations in the Philippines are regulated under two main frameworks: the BSP’s VASP license and the CEZA Fintech license. Each serves different purposes, depending on whether you plan to serve the domestic Philippine market or operate primarily as an offshore crypto company.

1. BSP VASP License (Virtual Asset Service Provider)

This license is issued by the Bangko Sentral ng Pilipinas, the country’s central bank. It allows companies to:

• Operate cryptocurrency exchanges

• Offer wallet and custody services

• Conduct remittances in digital assets

The BSP license is mandatory if you are servicing customers within the Philippines, dealing in Philippine peso (PHP), or engaging in fiat-to-crypto conversion.

2. CEZA Fintech License (Offshore Crypto License)

For companies targeting international markets, the CEZA license allows crypto operations in a regulated offshore framework. CEZA-authorized entities operate within a special economic zone and can:

• Launch global crypto exchanges

• Provide blockchain-based services

• Offer ICOs, STOs, or DeFi products (subject to sandboxing)

This structure is ideal for businesses that want regulatory recognition but don’t require a domestic presence in the Philippine market.

3. Other Relevant Licenses

• MSB (Money Service Business) registration – required in certain cases where crypto and fiat interact.

• SEC registration – needed for entities offering investment-related crypto products.

BSP Crypto License: In-Depth Guide (VASP Registration)

One of the most critical licenses in the Philippine cryptocurrency industry is the Virtual Asset Service Provider (VASP) license, issued by the Bangko Sentral ng Pilipinas (BSP) under Circular No. 1108. This license is mandatory for any company operating within the Philippines and engaging in crypto-related activities involving fiat transactions, exchange services, or wallet custody.

1. Who Needs a BSP VASP License?

You must apply for a BSP license if your company:

• Provides crypto-to-fiat or fiat-to-crypto exchange services

• Operates a crypto wallet or custody solution

• Offers remittance services using digital assets

• Serves customers residing in the Philippines

Companies that only engage in crypto-to-crypto trades or operate offshore without Filipino clients may not need a BSP license, though legal review is recommended.

2. Legal Requirements and Prerequisites

To be eligible for a BSP crypto license, companies must:

• Be registered with the Philippine SEC and have a local presence

• Have a minimum capital of ₱50 million (~$900,000 USD) for custodial services

• Appoint a compliance officer and internal auditor

• Establish robust KYC (Know Your Customer) and AML (Anti-Money Laundering) policies

• Maintain transaction monitoring systems

3. Required Documentation

Applicants must submit a comprehensive package, including:

• Business plan with crypto service scope

• Company profile and organizational chart

• KYC/AML manuals

• Security protocols for data and digital assets

• Risk management framework

• Proof of capital and funding sources

4. Application Process and Timeline

1. Pre-application consultation with BSP (optional but recommended)

2. Submission of documents via formal application

3. Evaluation period (3–6 months)

4. Interview and clarifications with BSP officers

5. Issuance of provisional license

6. Post-license audit before full operational authority is granted

The full BSP license process typically takes 6 to 12 months, depending on the complexity and completeness of documentation.

5. BSP License Cost

• Application Fee: ₱100,000 (~$1,800)

• Supervisory Fee: Annual charges based on transaction volume

• Legal and consulting fees: Varies, usually $15,000–$50,000 total

CEZA Crypto License: Offshore Crypto Business Setup

For crypto companies seeking to operate globally without servicing the Philippine market directly, the CEZA license is a strategic choice. The Cagayan Economic Zone Authority (CEZA) is a government-owned corporation offering a regulatory sandbox environment for fintech and blockchain businesses.

1. What Is the CEZA License?

The CEZA crypto license is designed to:

• Encourage foreign investment in blockchain innovation

• Allow offshore crypto exchanges and ICOs

• Provide a low-tax environment for fintech startups

The CEZA zone operates outside the BSP’s domestic regulations and is ideal for businesses targeting Asia-Pacific, Europe, and LATAM clients without needing a BSP license.

2. Categories of CEZA Licenses

CEZA offers two primary types of licenses:

• Principal License: For operating full crypto exchanges (trading, wallets, OTC services)

• Regular License: For supporting services such as wallet providers, brokers, or custodians

Each license tier has its own capital requirements and application obligations.

3. Key Advantages of CEZA Crypto License

• No domestic regulation by BSP

• Access to international clients

• Sandbox program for experimental fintech models

• Option to scale to Principal License level

• Lower capital requirements compared to onshore regulation

4. Legal and Financial Requirements

To obtain a CEZA license, applicants must:

• Establish a domestic corporation within CEZA

• Lease office space in the Cagayan zone

• Maintain minimum capital (varies by license type, starting at $500,000 USD)

• Submit a business plan, KYC policy, and AML framework

5. CEZA License Application Process

1. Pre-qualification and review by CEZA Fintech Division

2. Submission of business documents and security policies

3. Payment of application and license fees

4. Signing of CEZA Service Agreement

5. Receipt of Provisional Financial Technology Solutions License

6. Upgrading to Full License after sandbox testing

The approval timeline is typically 2 to 4 months, which is faster than the BSP license process.

6. CEZA License Cost Structure

• Application Fee: $10,000 USD

• Annual Fee: $60,000–$85,000 USD depending on license level

• Consulting & legal costs: Typically $20,000–$40,000 USD

• Office rental in CEZA: Separate cost, often subsidized

Taxation of Crypto Businesses in the Philippines

Understanding the tax implications of operating a crypto business in the Philippines is essential for legal compliance and long-term sustainability. While the country is open to blockchain innovation, both BSP-licensed and CEZA-licensed entities must consider the applicable tax framework.

1. Taxation for BSP-Licensed (Onshore) Crypto Companies

If your crypto company is licensed under BSP and operates within the Philippine domestic market, you are subject to standard Philippine tax laws. This includes:

• Corporate Income Tax: 25% on net taxable income

• Value Added Tax (VAT): 12% on services, including crypto-fiat exchange services

• Withholding Tax: 10–15% on dividends, royalties, and professional fees

• Local Business Taxes: Vary depending on LGU (Local Government Unit)

2. Taxation for CEZA-Licensed (Offshore) Crypto Companies

CEZA entities benefit from special tax incentives, including:

• 5% tax on gross income earned within CEZA (instead of 25% corporate tax)

• No VAT, no withholding tax, and no local business tax

• Zero tax on foreign-sourced income, making it attractive for offshore crypto exchanges

This offshore structure allows CEZA companies to legally minimize tax exposure, provided they do not operate or market directly to Philippine residents.

3. Taxation of Individuals Using Crypto

While business licensing is essential, it’s worth noting that individual users are also subject to taxation. As of recent BIR (Bureau of Internal Revenue) guidance:

• Profits from buying and selling crypto may be taxed as capital gains

• Crypto mining income is taxable as business income

• Crypto payments for goods/services must be declared for VAT and income tax

Advantages of Getting a Crypto License in the Philippines

The Philippines is increasingly seen as one of the top crypto licensing destinations in Asia — and for good reason. Whether you’re starting a small fintech company or launching a global exchange, here are the top benefits of incorporating and licensing your crypto business here.

1. Legal Recognition and Global Trust

The Philippines offers legal clarity for crypto operations, especially through the BSP’s VASP framework. A licensed crypto company in the Philippines gains:

• Credibility with banks, investors, and international partners

• Legal protection in disputes

• Access to legal recourse in the event of fraud or cybercrime

2. Access to the Southeast Asian Market

As part of the ASEAN region, the Philippines serves as a gateway to fast-growing economies such as Vietnam, Thailand, Malaysia, and Indonesia. A local crypto license makes regional expansion much easier and builds investor confidence.

3. Favorable Tax Regimes (Especially for CEZA)

CEZA’s offshore crypto license structure allows businesses to operate legally with minimal tax burden, fast licensing, and sandbox flexibility for innovation. It’s a major draw for:

• Blockchain startups

• NFT marketplaces

• Decentralized finance (DeFi) applications

4. Skilled Talent and English-Speaking Workforce

The country is home to one of the largest tech-savvy, English-speaking populations in the region, making it ideal for staffing blockchain projects, customer support, and back-office operations.

5. Lower Cost of Operations Compared to Singapore or Dubai

The total cost of obtaining and maintaining a crypto license in the Philippines — even with BSP compliance — is significantly lower than in Singapore, Switzerland, or UAE. This includes:

• Lower government fees

• Affordable office and staffing costs

• Flexibility in choosing onshore or offshore setup

Challenges and Compliance Risks in Philippine Crypto Licensing

While the Philippines offers an attractive regulatory environment for crypto businesses, operating under either BSP or CEZA also comes with certain challenges and ongoing compliance risks. These must be managed carefully to avoid penalties, license revocation, or reputational damage.

1. Strict KYC/AML Requirements

BSP-licensed crypto businesses are required to:

• Implement robust Know Your Customer (KYC) procedures

• Maintain Anti-Money Laundering (AML) controls

• Conduct regular audits and compliance checks

• Monitor and report suspicious transactions to the Anti-Money Laundering Council (AMLC)

Even offshore CEZA-licensed companies are expected to adopt international KYC/AML best practices. Non-compliance may result in fines, suspension, or blacklist inclusion.

2. Ongoing Reporting Obligations

BSP-licensed VASPs must:

• Submit monthly, quarterly, and annual reports

• Maintain detailed logs of all crypto-fiat transactions

• File suspicious transaction reports (STRs)

• Prepare for random audits from the BSP

CEZA-licensed companies must periodically update CEZA on business activity and may face sandbox re-evaluation for experimental products.

3. Limited Local Banking Support

Some crypto companies face difficulty opening local bank accounts due to conservative compliance policies. However, BSP licensing significantly improves banking relationships. Partnering with EMIs or crypto-friendly banks abroad may be necessary during early stages.

4. Evolving Regulatory Landscape

The global regulatory landscape is rapidly shifting. The Philippines, while progressive, updates crypto rules regularly to comply with:

• FATF recommendations

• G20 AML directives

• Regional financial integrity agreements

Step-by-Step Process to Obtain a Crypto License in the Philippines

Whether you pursue a BSP VASP license or CEZA fintech license, the process involves multiple stages — from incorporation to final approval. Here’s a step-by-step roadmap:

1. Choose the License Type

Ask:

• Are you targeting local Filipino customers? → BSP License

• Are you operating globally/offshore? → CEZA License

• Will you offer custody or fiat gateways? → You may need BSP even under CEZA

Tip: Hybrid models are possible but require separate compliance efforts.

2. Incorporate a Legal Entity

For BSP:

• Register with the Securities and Exchange Commission (SEC)

• Establish a domestic corporation with Filipino director(s)

• Open local bank account to deposit paid-up capital

For CEZA:

• Incorporate within the Cagayan Economic Zone

• Lease office space in CEZA (physical or virtual office acceptable)

• Appoint local CEZA liaison or representative

3. Prepare Regulatory Documents

Includes:

• Business plan detailing crypto operations

• KYC/AML policy manuals

• IT infrastructure overview (encryption, custody protocols)

• Proof of capital sufficiency

• Board resolutions, governance framework

Make sure all documentation aligns with BSP Circular 1108 or CEZA’s fintech guidelines.

4. Submit Application

• File with the BSP or CEZA, including all supporting documents

• Pay application and license fees

• Undergo pre-qualification and screening process

Optional: Engage legal or compliance consultants for guidance (recommended for foreign founders).

5. Attend Interviews and Follow-Up Requests

Both regulators may:

• Request additional documents

• Schedule video interviews or in-person presentations

• Test your system’s compliance, security, and risk controls

Respond promptly and maintain transparency to avoid delays.

6. Receive Provisional or Full License

• BSP typically issues provisional licenses first, pending operational validation

• CEZA may issue a sandbox license, allowing limited activity during testing

After proving compliance in sandbox or audit phase, you’ll receive full operating authority.

7. Maintain Compliance and Renewals

• File required reports (monthly, quarterly, annually)

• Prepare for on-site inspections

• Stay updated on crypto regulatory changes

• Renew licenses annually with updated documents and fees

How to Choose Between BSP and CEZA Crypto Licenses

One of the most common questions for crypto entrepreneurs is:
“Should I get a BSP or CEZA crypto license in the Philippines?”
The answer depends on your target market, business model, and growth strategy.

Here’s a breakdown to help you decide:

BSP License (Virtual Asset Service Provider)

Best for:

• Domestic operations

• Fiat-crypto services involving Philippine Peso (PHP)

• Local remittances and e-wallet services

• Partnering with local banks and payment providers

Choose BSP if:

• You’re targeting Filipino customers

• Your platform supports PHP deposits/withdrawals

• You want legal certainty under Philippine financial law

Pros:

• Full legal recognition from the Central Bank

• Easier access to local banks and mobile payment systems

• Supports full compliance with international AML regulations

Cons:

• Higher capital requirement (₱50M+)

• Longer application process (up to 12 months)

• Requires full physical presence and Filipino directors

CEZA License (Offshore Crypto Exchange License)

Best for:

• International crypto exchanges

• Blockchain platforms, DeFi apps, NFT marketplaces

• Companies not serving the Philippine market

Choose CEZA if:

• You want to run an offshore crypto company with lower taxes

• You need a sandbox model to test fintech innovations

• You plan to attract global users (Asia-Pacific, LATAM, EU)

Pros:

• Lower capital requirement (~$500K)

• Faster license approval (2–4 months)

• Offshore tax benefits (5% GIT, no VAT)

Cons:

• Cannot actively market to Philippine residents

• Fewer banking partners in the Philippines

• Requires physical presence in CEZA zone (can be outsourced)

Comparison Table

Conclusion: Is a Crypto License in the Philippines Worth It?

Absolutely. Whether you’re launching a local crypto exchange, building a DeFi protocol, or expanding a global blockchain-based service, the Philippines offers two highly strategic options:

• BSP VASP License — for regulated onshore activities, fiat integration, and full legal clarity

• CEZA Offshore Crypto License — for fast-tracking global crypto operations with flexible taxation

Next Steps: Ready to Get Licensed?

If you’re serious about launching or expanding your crypto project in Asia, our team can help with:

End-to-end BSP and CEZA licensing support
Company registration, KYC/AML documentation
Local director/agent sourcing
Office setup and legal reviews
Banking and payment gateway introductions