Manila is taking significant steps to regulate the burgeoning cryptocurrency industry, balancing innovation with investor protection and fiscal responsibility. The Securities and Exchange Commission (SEC) recently clarified that cryptocurrency trading remains legal in the Philippines, provided service providers register with the regulator. Meanwhile, the government has committed to adopting a global tax framework to combat cross-border tax evasion and illicit financial flows involving digital assets. These dual efforts signal a pivotal moment for the country’s approach to digital currencies, as adoption continues to grow among Filipinos.
SEC Clarifies Crypto Trading Rules
The SEC issued an advisory on August 18, 2025, affirming that cryptocurrency trading is not prohibited in the Philippines. However, the regulator emphasized that platforms must be registered and licensed under the new Crypto Asset Service Providers (CASP) rules, which came into effect on July 5. These guidelines aim to ensure investor protection and market integrity while fostering a competitive yet responsibly regulated environment for the crypto industry.
The CASP rules mandate that companies offering crypto services must register with the SEC and meet stringent requirements, including a minimum paid-up capital of 100 million Philippine Pesos (~US$1.78 million) in cash or property, excluding crypto assets. This financial threshold is intended to ensure that only serious and financially stable entities operate within the market. The SEC also highlighted its authority to investigate and restrict access to unregistered platforms, a measure designed to curb fraudulent activities and protect consumers. 
The regulator underscored the importance of these regulations in a statement: “This ensures that investors are protected, market integrity is upheld, and all market participants operate on a level playing field.” It further noted the need for responsible regulation to support the sustainable growth of the crypto sector in the country, acknowledging the industry’s rapid evolution and its potential to transform financial systems.
Cryptocurrency gained significant traction in the Philippines during the pandemic, with the SEC estimating around 750,000 users at the time. This surge reflects a broader global trend, with digital assets becoming an alternative investment and transaction medium for many. The Philippines has emerged as a regional leader in crypto adoption, ranking eighth globally according to data from Chainalysis in October of the previous year, surpassing neighbors like Thailand (16th) and South Korea (19th).
Enforcement Actions Against Unregistered Platforms
Even before the CASP rules were implemented, the SEC took decisive action against unregistered crypto platforms. Binance, one of the world’s largest cryptocurrency exchanges, was banned in the Philippines last year after the regulator found it operating without a license to solicit investments. The SEC requested the removal of Binance from the Google Play Store and Apple App Store, signaling a zero-tolerance policy for non-compliance. Registered in the Cayman Islands, Binance facilitates trading for over 402 cryptocurrencies, including major assets like Bitcoin and Ether, but its lack of local registration led to its exclusion from the Philippine market.
This enforcement action underscores the SEC’s commitment to ensuring that only licensed entities serve Filipino investors. The move against Binance serves as a warning to other international platforms seeking to operate in the country without adhering to local regulations. It also highlights the challenges regulators face in overseeing a borderless digital asset market, where platforms can easily attract users across jurisdictions without establishing a local presence.
Global Tax Framework to Combat Illicit Flows
Beyond domestic regulation, the Philippine government is aligning with international efforts to address the fiscal challenges posed by cryptocurrencies. The Department of Finance (DOF) announced the country’s commitment to fully adopt the Crypto-Asset Reporting Framework (CARF) by 2028, coinciding with the end of President Ferdinand Marcos Jr.’s term. Introduced by the Organization for Economic Cooperation and Development (OECD) in collaboration with G20 countries, CARF aims to enhance transparency in crypto transactions by facilitating the annual, automatic exchange of tax information among participating jurisdictions.
Crypto assets, often exchanged via blockchain or decentralized ledgers, can anonymize transactions and be transferred without traditional financial intermediaries like banks. This characteristic makes them difficult to tax and susceptible to use in illicit activities. The DOF emphasized that adopting CARF is crucial for combating cross-border tax evasion and ensuring that crypto users pay their fair share of taxes. Finance Secretary Ralph Recto reinforced this stance, stating, “We need faster and stronger systems for collaboration if we are to beat tax evasion and illicit transactions.”
The Philippines joins 67 other jurisdictions, including 10 in Asia, that have pledged to implement CARF by 2027 or 2028. This commitment was formally signified by Finance Undersecretary Charlito Martin Mendoza during the 8th Asia Initiative Meeting in Malé, Maldives. The move aligns with the Marcos administration’s broader fiscal strategy, which prioritizes improved tax administration over new taxes to address budget deficits. Recent data from the DOF indicates that revenue collection reached 522.1 billion Philippine Pesos (~US$9.3 billion) in April, contributing to a four-month total of 1.5 trillion Philippine Pesos (~US$26.7 billion), driven largely by an 11.49% increase in tax revenues.
Balancing Innovation and Regulation
The dual approach of domestic regulation and international cooperation reflects the Philippines’ nuanced strategy toward cryptocurrencies. On one hand, the SEC’s CASP rules aim to create a safe and structured environment for local crypto trading, encouraging legitimate businesses while weeding out bad actors. On the other hand, the adoption of CARF demonstrates a forward-thinking commitment to addressing the global challenges of taxing digital assets, ensuring that the country remains competitive in the international financial landscape.
However, regulating cryptocurrencies is no easy task. The decentralized nature of blockchain technology poses unique challenges for enforcement, as transactions can occur outside traditional regulatory frameworks. Moreover, the rapid pace of innovation in the crypto space often outstrips the ability of regulators to adapt, creating a cat-and-mouse game between authorities and industry players. The ban on Binance, for instance, raises questions about how effectively the SEC can enforce its rules against other unregistered platforms that may continue to target Filipino users through less visible channels.
Additionally, while the CARF framework promises greater transparency, its success hinges on widespread adoption and cooperation among jurisdictions. If major crypto hubs or tax havens opt out, the framework’s effectiveness could be undermined, leaving gaps for illicit activities to persist. For the Philippines, implementing CARF will also require significant investment in digital infrastructure and capacity building to monitor and report crypto transactions accurately.
Implications for Filipino Investors and the Economy
For Filipino crypto users, the SEC’s clarified rules bring both opportunities and responsibilities. Legitimate platforms will likely see increased trust and user engagement as they comply with regulatory standards, potentially driving further adoption. However, investors must remain vigilant, ensuring they engage only with registered providers to avoid falling victim to scams or losing access to platforms that fail to meet SEC requirements.
From an economic perspective, the regulated growth of the crypto industry could position the Philippines as a regional leader in digital finance. The high adoption rate, as evidenced by the Chainalysis ranking, suggests a tech-savvy population eager to embrace innovative financial tools. If harnessed correctly, this enthusiasm could attract investment and foster entrepreneurship in blockchain and related technologies, contributing to economic diversification.
Yet, the fiscal implications of crypto taxation under CARF are equally significant. By ensuring that digital asset transactions are taxed appropriately, the government can bolster its revenue base without imposing new burdens on traditional sectors. This approach aligns with the Marcos administration’s commitment to fiscal prudence, focusing on plugging loopholes rather than increasing tax rates. However, the challenge lies in educating the public about tax obligations related to crypto, as many users may be unaware of reporting requirements or the legal risks of non-compliance.
Looking Ahead
As the Philippines navigates the complex landscape of cryptocurrency regulation, the coming years will test the effectiveness of both the SEC’s CASP rules and the global CARF framework. The balance between fostering innovation and protecting public interest remains delicate, with potential missteps carrying economic and reputational consequences. Will Manila emerge as a model for responsible crypto regulation in Southeast Asia, or will enforcement challenges hinder progress? Only time will tell, but the steps taken today lay a critical foundation for the future of digital finance in the country.
