Small crypto startups in the Philippines may be sidelined as the SEC enforces a P100-million capital threshold for service providers, sparking fears of stifled innovation and increased market dominance by major players.
The Securities and Exchange Commission (SEC) of the Philippines has rolled out new regulations for crypto-asset service providers (CASPs), but experts warn that the steep capital requirements could deter smaller firms and local startups from entering the market.
According to SEC Memorandum Circular No. 5, corporations seeking CASP registration must present a paid-up capital of at least P100 million in cash or property, excluding any cryptocurrency holdings. Applicants must also demonstrate that they possess the financial strength to ensure business continuity and resilience.
In addition to the capital requirement, firms must obtain a license from the SEC to operate legally as a CASP.
For many in the industry, the new guidelines pose a significant challenge. “The P100-million capitalization required for CASPs stands as a major problem for most builders in the Philippines. This is overregulation in my opinion. There should be tiers to this at the very least,” said Jiro Luis S. Reyes, CEO of the crypto education platform Bitskwela.
“Since the CASP rules cover any CASP, this could technically mean that anyone who wants to build a homegrown Pinoy Web3 product would need to meet the P100 million,” he added.
Reyes expressed concern that the high barrier to entry could force Filipino innovators to move their operations abroad, draining the country of homegrown talent and stunting technological advancement. “This would probably mean that Filipino builders would just choose different markets or countries to launch in, resulting in less innovation for us,” he said.
“Larger players will have an easier time penetrating the market — there are clearer rules now, which work in their favor. But for smaller players and communities, it feels like a loss. There’s not much upside for them at this stage,” he added.
Arlone P. Abello, founding chairman of the Innovative Movement of the Philippine Association of Crypto Traders, supported the push for accountability but recommended a tiered system to support smaller firms. “These requirements ensure operational accountability but could be more challenging for early-stage startups with limited resources. A differentiated approach may help support innovation while upholding oversight,” he said.
Abello also urged the SEC to strengthen investor protection measures by introducing rules against market manipulation and insider trading. “These are important investor protection measures, and their reintroduction via future rules or guidance may be helpful,” he noted.
He called for better collaboration among regulatory bodies such as the SEC, Bangko Sentral ng Pilipinas, and the Department of Information and Communications Technology to improve industry compliance. “There should also be enhanced coordination among relevant regulators to ensure a harmonized compliance environment, especially for multilayered business models,” Abello said.
In terms of public education, Abello recommended the establishment of a voluntary certification system for crypto educators and a centralized portal to guide stakeholders through registration and compliance steps.
From the corporate sector, GCash Vice President and Group Head for New Businesses, Winsley Royce Bangit, expressed support for the SEC’s regulatory framework. “Clear regulatory guidelines create a more stable environment for innovation and allow responsible players like us to grow sustainably while ensuring user security,” he said.
GCash operates the GCrypto platform, which had 2.7 million users and 48 listed cryptocurrencies as of the first quarter of 2025.
To ensure transparency and proper governance, the SEC also requires CASPs to submit detailed documentation, including a business plan, descriptions of software and hardware components, business conduct rules, and listing standards for crypto-assets.
Citing data from the 2024 Geography of Crypto Report by Chainalysis, the SEC revealed that the Philippines received an estimated $40 billion in cryptocurrency value from July 2023 to June 2024.
“The Philippines is experiencing a widespread adoption of crypto-assets. The continued growth and development of new crypto-asset markets, services, and business models relies on clear, proportionate, and robust regulatory frameworks, which can ensure that markets are fair, efficient, and transparent,” the SEC stated.
In a move to support innovation, the commission in April opened applications for its strategic sandbox initiative, allowing CASPs to pilot products within a controlled regulatory environment.
