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- GCash partners with VASP licensee PDAX to launch GCrypto, which could pave the way for other companies to explore similar strategies.
- Over 19 VASP licensees in the Philippines could provide opportunities for more partnerships in the crypto-to-fiat space.
- VASP application period on hold for three years, leaving limited options to obtain a license, including acquiring a company with one or partnering with a licensee.
GM. Last week, BitPinas co-presented the monthly web3 community meetup at Draper Startup House Manila (which organized the event). In that meetup, GCash’s Head of Partnerships for GCrypto and NFTs – Mark Nunez – answered questions which have been on the minds of everyone who has an interest in the growing #CryptoPH landscape:
- Why did it take so long for GCash to launch GCrypto. (It was first announced in May 2021.)
- Is GCash going to secure a virtual asset service provider (VASP) license from the Bangko Sentral ng Pilipinas? (Should be around the 57:00 mark in this video.)
Although GCash does not have a VASP license, their plan had always been to partner with a licensed entity to launch GCrypto. Its CEO mentioned that in 2021. Actually, most of the products launched or introduced by GCash during its Futurecast Summit last month were also with partners. For GCrypto, it was with PDAX — a VASP licensee.
The intriguing takeaway? I think the real underlying story here is that you can partner with a VASP licensee to launch your crypto-to-fiat company.
But it isn’t that simple.
Of course, there are additional BSP requirements for a full launch, so this is somewhat simplified, add the fact that you have to get their approval.
However, with over 19 VASP licensees in the Philippines (some dormant), GCash has paved the way for others to consider this strategy. I wouldn’t be surprised if companies are already exploring this option. (Note that GCash and PDAX are both central bank-supervised entities. More on this later.)
I believe this isn’t the first time we’ve seen such a partnership. Previously, an exchange called Paylance operated in the Philippines, enabling companies to pay employees in crypto. Paylance was “powered by Bloom,” a locally licensed company at that time when only three VASP licenses existed. I am not aware if Paylance is still operating, but its owners (also behind Moneybees) eventually obtained their own license in 2020.
With the VASP application period on hold for the next three years, someone whom I cannot name (but thank you!) told me there may only be three ways to obtain one:
- Acquire a company that already has one.
- Become a supervised institution of the BSP. (GCash is a supervised institution of the BSP, will it obtain its own license in the future?)
- Obtain a “limited” license from the BSP (similar to UnionBank, which also meets condition 2).
There’s also a quasi-fourth option: Partner with a VASP licensee.
But when all is said and done and deals are made, you must and you will still have to face the final boss for approval:
The Central Bank!
(Please forgive the JRPG reference, if ever you caught that.)
This article is published on BitPinas: GCash Riding on PDAX Crypto License: Will Others Do The Same?
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.