The Bangko Sentral ng Pilipinas has proposed a new compliance timetable that would require licensed crypto firms, e-wallet providers, digital banks and major retail banks to connect customer onboarding systems to the Philippine government’s National ID Authentication Services.
Under the draft memorandum, covered institutions would have three months from the rule’s official issuance to submit complete onboarding applications and related regulatory documents to the Philippine Statistics Authority. The change would shift identity checks away from manual uploads of physical IDs and toward real-time verification against the national identity database.
Who falls under the first deadline
The first wave covers Virtual Asset Service Providers, Electronic Money Issuers, digital banks, and universal and commercial banks with retail operations. According to the draft, these firms would be treated as compliant once they have filed a complete application with the Philippine Statistics Authority, or PSA, within the 90-day window.
A second rollout phase would extend the requirement to non-retail commercial banks, thrift banks, rural and cooperative banks, and payment system operators that conduct customer or merchant verification. Those entities would have six months from the memorandum’s effectivity date to comply.
For newly licensed crypto exchanges or other fintech businesses entering the market after the rule takes effect, the same deadline structure would apply starting from their official BSP registration date.
How onboarding would change
Once integrated, participating institutions would no longer need prospective customers to present or upload photos of plastic ID cards or paper documents for first-time account opening. Instead, firms would query the government registry through the National ID eVerify system.
The draft describes two authentication levels. Tier 1, or Basic Online Authentication, would perform an automated backend token match and return a simple confirmation result. Tier 2, described as Electronic KYC, would allow the requesting institution and the PSA to exchange pre-agreed demographic data fields for deeper due diligence.
Successful checks could include biometric verification such as facial recognition alongside demographic matching, and these results would satisfy know-your-customer requirements for onboarding.
Fallback rules and enforcement risk
The draft also provides alternatives if the new system cannot be used in a given case. If a customer does not have a National ID, or if the National ID Authentication Services experience downtime, institutions may rely on other valid government-issued IDs under a risk-based approach.
The BSP indicated that institutions that do not submit complete applications or fail to address compliance delays within the prescribed period could face supervisory enforcement action. The proposal therefore sets not only a technical migration path but also a regulatory deadline for institutions that onboard retail users.
Why the BSP is pushing the change
The planned integration is aimed at two long-standing issues in digital finance onboarding: customer drop-offs caused by cumbersome document submission and identity fraud involving fake physical IDs. By moving verification to direct database checks, the BSP is seeking more consistent and secure customer identification across regulated firms.
The source article says more than 90 million Filipinos, or around 80% of the population, are already registered under the Philippine Identification System, known as PhilSys. That scale gives the central bank a large existing base for a common verification standard across crypto platforms, e-wallets and banks.
The next confirmed step is the official issuance of the memorandum. Only after that date would the three-month and six-month compliance clocks begin for the institutions covered by the draft rule.
Source: bitpinas.com