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Online gaming platforms should employ KYC verification processes to make payments more secure.
The central bank of the Philippines has issued a public warning against fraudulent financial activities that occur through “play-to-earn” online games, even though the bank recognized that such platforms have the potential to boost financial inclusion and digital payments in the country.
“The Bangko Sentral ng Pilipinas (BSP) advises those engaging in these games to be thoroughly aware of how these work, as the digital space provides a borderless and wider playing field for fraudsters or cybercriminals to carry out illicit financial activities,” the bank stated.
Earlier, the central bank highlighted that an online “play-to-earn” game called Axie Infinity has become popular among Filipinos, although it is not yet registered with regulators. In its note, BSP stated that play-to-earn games pose potential for financial abuse.
“Digital gaming token transactions have a high degree of anonymity and are not subject to Know Your Customer policies,” it said.
The BSP warned that such online gaming is vulnerable to hacking, identity theft, and cyber threats since they often involve virtual assets.
Additionally, BSP has been working closely with other financial regulators such as the Securities and Exchange Commission (SEC) to develop a coordinated approach in dealing with the emerging trends of virtual assets or cryptocurrency, including play-to-earn games.
KYC verification measures are typically applied during the initial stage of account opening to keep a record of the true identity of players. This allows gaming providers to make the platform more secure, safeguarding the players against money launderers, identity thieves, and other financial criminals.