BPI has launched a pilot using stablecoin payments for cross-border settlement in the Philippines. The bank aims to speed up inbound transfers and reduce costs. Freelancers, virtual assistants, and other overseas income earners will join the first phase of testing.
The Ayala-led bank is cooperating with international clearing firm Meridian for the new program. ABS-CBN and the Philippine Daily Inquirer reported details of the partnership. Transactions will be processed overseas before being converted to pesos.
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How Will BPI Stablecoin Payments Work?
Initially, stablecoin payments will be used to pay foreign salaries and income. It will be aimed at freelancers, virtual assistants, and informal economy employees. The recipients will get the money converted to pesos and deposited to their BPI account.
BPI is going to scale the pilot project ahead of the 49th ASEAN Summit in November. The bank is expected to present the project in the course of the summit. It will represent it as a result of its efforts on digital banking development.
This new solution will not substitute for the existing banking system of BPI. Stablecoins will act as a settlement layer between sender and recipient of the payment. Such an approach combines the stablecoin payments with the benefits of the banking system.
Customers will not need to hold or manage digital tokens. BPI will deposit the Philippine pesos to the customer’s account after each transaction. The setup keeps the customer experience within the bank’s channels.
Why BPI’s Stablecoin Pilot Depends on BSP Safeguards
According to BPI’s CEO Jose Teodoro Limcaoco, the development was connected to the bank’s digitalization initiatives. He said recipients should receive overseas funds faster and at lower cost. He added that the service would continue to meet the bank’s security standards.
Moreover, Meridian’s CEO Will Haering also commented on the collaboration. According to him, the technology of stablecoins could work in an existing banking system. Moreover, he claimed that reliability and customer protection measures would remain in place.
According to BPI, the project would launch under the supervision of the Bangko Sentral ng Pilipinas. The further development of stablecoin transactions would depend on protection mechanisms. Among these measures, there are consumer protection and transparent stablecoin reserve requirements.
The project is implemented against the backdrop of regulators’ attempts to regulate digital assets and tokenization activities.
In June, the BSP tightened regulations for licensed virtual asset service providers. According to the new directive, due diligence would be conducted prior to listing any cryptocurrency on exchanges.
What Rules Apply to Philippine Stablecoin Payments
Under the new guidelines, exchanges would conduct investigations into the issuers’ background and market maturity. Furthermore, such aspects as transparency, liquidity, legal conformity, and use cases would be assessed.
Philippine companies offer stablecoin payments using blockchain solutions. Thus, in 2024, Coins.ph expanded the PHPC stablecoin backed by the Philippine peso to the Ronin blockchain. It helped the users make funds transfers and spend their gaming earnings.
PHPC uses the Ethereum network and is one-to-one pegged to the Philippine peso. Coins.ph uses cash and traditional financial instruments as reserves.
Broader stablecoin payments from BPI will require BSP coordination and compliance with consumer safeguards, reserve transparency, and regulatory requirements.
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