Editing by Nathaniel Cajuday
The Bangko Sentral ng Pilipinas (BSP) Monetary Board (MB), the Commission’s policy-making body, has approved the Test and Learn Framework, also known as the Regulatory Sandbox, that will allow the central bank-regulated institutions and related firms to test and offer some innovative products in a controlled environment that may eventually be useful for the domestic financial system.
BSP Governor Felipe Medalla highlighted that the central bank “has always championed responsible innovation since we see it as a catalyst to promote efficiency in the financial system and expand financial inclusion.”
“We are deeply committed to ensuring that attendant risks in using new technologies are effectively managed through enabling and responsive regulations,” he added.
As per the framework’s guidelines, the sandbox project will operate for 12 months, where each sandbox will undergo a four-stage process, including application, evaluation, testing, and exit stages. The BSP will then determine whether the sandboxed product/service is “fit for broader or mass adoption.”
“Insights from the regulatory sandbox projects will inform the development of policies necessary to regulate the activities within and around new or emerging financial solutions,” the BSP chief stated.
Accordingly, institutions applying to test a certain product using the framework are advised to use the Regulatory Sandbox Lite, which has a shorter assessment period.
However, this is only applicable to “products or services that are already within the scope of existing regulations.”
“We can achieve a careful balance between the perceived benefits of these emerging technologies while managing attendant risks by providing a controlled environment for these digital players to harness technology and probe the limit of what’s possible… Moreover, this will promote a level playing field for relevant stakeholders who share the Bangko Sentral’s goal of promoting the welfare of Filipinos by maintaining a safe, secure, and truly inclusive financial system,” Medalla concluded.
Consequently, the BSP appealed to the Senate during a meeting with the Committee on Banks, Financial Institutions, and Currencies that the country needs specified regulations on digital assets and the digital space in order to protect consumers with the rapid adoption of cryptocurrency and blockchain technology in the Philippines. (Read more: BSP Seeks Passage of Digital Asset Law)
In line with this concern, Deputy Governor Chuchi Fonacier signed a memorandum imposing a ban on VASP license applications for the next 3 years. (Read more: BSP Imposes Ban on VASP License Application)
This article is published on BitPinas: Bangko Sentral OKs Regulatory Sandbox for Banks
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