Philippines Eyes Crypto Reform with Draft Rules and Sandbox Innovation

The Philippine Securities and Exchange Commission (SEC) is laying the groundwork for regulating the country’s fast-growing digital asset space. Through its newly proposed Crypto-Assets Service Providers (CASP) Guidelines, the SEC aims to bring clarity, control, and compliance to the cryptocurrency industry, per CoinGeek. But while the rules are tough, there’s also space for flexibility—some businesses may qualify for exemptions.

For anyone operating in the crypto ecosystem—especially exchanges, custodians, or blockchain service providers—these developments are worth close attention.

Draft Guidelines: A Clear Regulatory Framework

The draft, titled “The SEC Guidelines on the Operations of Crypto-Assets Service Providers”, lays out requirements for companies offering crypto services in the Philippines. Released by the PhiliFintech Innovation Office, the proposal includes a mandatory minimum paid-up capital of PHP100 million (about $1.75 million USD) for any entity that wants to register as a CASP.

This capital requirement is more than a number. The SEC wants assurance that any business entering the space is built to last. 

Applicants must prove they can meet their financial obligations and handle potential risks. The focus is on financial stability, long-term viability, and strong investor protection.

The guidelines are now open to public comment until April 26, marking a crucial stage before final implementation.

Not Just Capital — Compliance Is Key

To qualify, companies must be formally registered with the SEC and have a corporate purpose clearly linked to crypto-asset services. This includes cryptocurrency exchanges, virtual asset custodians, and other blockchain platforms.

The draft outlines a wide range of documentary requirements. These include:

• Technical architecture and software documentation 
• Internal business policies and trading rules
• Custodian information and agreements
• Board resolutions and proof of fee payments 
• Risk control documentation and disclosure matrices
• CVs of top management and IT personnel
• A detailed business plan covering marketing and finance

Everything must reflect not just the company’s business goals but also its ability to operate securely, transparently, and under regulatory oversight.

Room for Exceptions — If Public Interest Justifies It

What makes these proposed rules particularly interesting is their built-in flexibility.

According to Section 3 of the draft, the SEC may grant exemptions from the registration requirements. However, this won’t be automatic. Exemptions must be applied for and justified based on public interest and investor protection.

The SEC has left the language broad on purpose. This allows for case-by-case decisions, especially in situations where a company may be serving a niche market or testing a new model that doesn’t yet fit neatly within regulatory boxes.

This measured openness could help smaller, innovative startups survive in a space that’s becoming increasingly dominated by large players with deep capital reserves.

Working with Other Regulators

The CASP Guidelines also clarify that they don’t override the roles of other financial authorities in the Philippines. For example, the Bangko Sentral ng Pilipinas (BSP) will still oversee certain digital asset-related services, including payment systems and remittances.

This layered regulatory setup means crypto businesses must engage with multiple agencies depending on the nature of their services. Coordination, not conflict, is the goal—but startups need to be ready for this multi-tiered compliance environment.

Strategic Sandbox: A Testing Ground for Crypto Innovation

In parallel with the draft guidelines, the SEC has also launched the Strategic Sandbox (StratBox) under SEC Memorandum Circular No. 09-2024. This initiative allows crypto businesses to test their models in a controlled environment.

Think of the StratBox as a proving ground. It gives the SEC real-time data on risks and opportunities while offering participating businesses a chance to refine their services without immediately facing full compliance burdens.

Services eligible for StratBox include crypto exchanges, token platforms, virtual asset custodians, and potentially other fintechs engaged in related sectors. Applicants must fill out a formal application and submit it electronically to the PhiliFintech Innovation Office.

Impact on the Industry

The SEC’s dual strategy—tight rules with optional flexibility—signals a maturing digital asset policy. The capital threshold will deter undercapitalized or opportunistic players, which may lead to industry consolidation. At the same time, the StratBox and exemption provisions offer hope to smaller, more agile businesses trying to build something useful and compliant.

This could be the start of a new phase for cryptocurrencies like Bitcoin, Ethereum and Solana in the Philippines. A phase where the industry grows within defined legal structures. A phase where both regulation and innovation can thrive, side by side.