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BSP has suspended the popular social media platform and payment app Lyka due to lack of registration with the central bank.
Lyka has been operating in Southeast Asia since 2019, launched by a Hong Kong-based firm called Things I Like Company Ltd. The social media platform allows users to purchase and exchange goods and services using Lyka’s unique “GEMS” of “gift cards in electronic mode.”
Due to the nature of its business, BSP ruled that Lyka is an operator of payment system (OPS) and thus required to abide by the National Payment Systems Act (RA 11127) and register with the BSP.
In its memo, the BSP stated that its decision is "without prejudice to other enforcement actions against the OPS" and its officers should they not comply with BSP's order.
According to BSP, Lyka has shown “willingness” to register with BSP. Registration with the BSP as an OPS entails allowing the BSP to oversee its operations to ensure that Filipino consumers are protected.
How does Lyka work?
To clarify, Lyka’s GEMs are not a cryptocurrency. Users can earn GEMs by posting on their profiles, and they can then use those GEMs at partner establishments, like restaurants and retail stores. If Axie Infinity is an earn-as-you-play concept, Lyke is an earn-as-you-post concept. You can earn GEMs by liking someone’s photo, and you can send GEMs to followers. On Lyka, the rate is fixed and one GEM equals one peso.
Lyka encountered a number of privacy concerns last year at its peak popularity, with some users pointing out their concerns with the terms of usage page. The company has since affirmed that user information and privacy is a priority.
Why is BSP suspending Lyka?
Because it’s not registered as an operator of payment system.
Almost all banks with banking apps like BPI, digital payment apps like Alipay, local pawnshops with apps like P.J. Lhullier are registered with the BSP as an OPS. The BSP requests that the public only use OPS with a valid certificate of registration. You can view the full list of registered OPS’ in the Philippines here.
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