BSP is considering categorizing Axie Infinity as an OPS, similar to GCash and PayMaya.
The Bangko Sentral ng Pilipinas (BSP) does not consider Axie Infinity to be a virtual asset service provider (VASP), and the central bank is considering categorizing the game as an Operator of Payment System (OPS), similar to GCash, PayMaya, and other banks.
Having stated that, the BSP is closely monitoring Axie Infinity, how players utilize and trade Smooth Love Potion (SLP) tokens or digital assets as a means of payment, and the size of its merchant network.
“However, we are also actively monitoring the degree of merchant acceptance of SLP as a means of payment for goods/services, which may come under the operations of an OPS,” the central bank stated, according to a Manila Bulletin article.
Sky Mavis, a technology-focused gaming company established in early 2018, is behind Axie Infinity.
It is categorized as an NFT game since it enables players to earn money by breeding, raising, battling, and trading Axie animals in the marketplace.
VASPs are subject to the BSP’s authority over cryptocurrency-related activity.
The BSP, on the other hand, said that Axie Infinity “is not regarded a VASP.”
The BSP’s legal framework for VASPs enables end-users to convert fiat money to crypto-assets to purchase NFTs for gaming applications and then convert the same back into fiat currency.
BSP Circular No. 1108, or the Guidelines for VASPs, published in January 2021, acknowledges the developing virtual asset systems or markets, as well as the dangers associated with their anonymity, price volatility, and transaction “velocity.”
Once fiat money is swapped or converted into virtual assets, it is readily transferable and used for payment, which is why VASPs are classified as money service companies and are regulated by the BSP, according to the Manila Bulletin.
According to the central bank, Axie Infinity is not a VASP since the scope of BSP Circular No. 1108 “excludes digital units of exchange utilized as in-game tokens, such as the implementation of SLP inside Axie Infinity.”
Furthermore, the central bank keeps track of how blockchain gaming app players utilize non-fungible tokens (NFTs) to purchase goods and services that may come within the purview of an OPS.
BSP’s continuing surveillance is to determine if Axie Infinity’s actions might be classified as OPS.
OPS is defined as cash-in service providers, bill payment service providers, and organizations such as payment gateways, platform providers, payment facilitators, and merchant acquirers that allow sellers of goods and services to accept cash or digital payments under BSP rules.
As an OPS, it is necessary to register with the BSP following Circular No. 1049, which lays out the requirements for OPS registration.
Furthermore, once the BSP determines that Axie Infinity players utilize and trade Smooth Love Potion (SLP) tokens or cryptocurrency assets as a form of payment for goods, it will compel Sky Mavis or its local partner to register with the BSP as an OPS; otherwise, it should cease operations.
Lyka was a popular platform that served as an OPS.
The BSP, on the other hand, ordered it to cease operations as an (OPS) and advised it to seek registration first before continuing with its activities.
Manila Bulletin is the source.