The Bank of the Philippine Islands (BPI) has announced a partnership with Meridian to test a stablecoin settlement system for cross-border payments. This pilot, unveiled on Thursday, is designed to enhance the efficiency of remittances from overseas.
Targeting Informal Economy Workers
Initially, the pilot will cater to inbound payroll credits for informal economy workers, such as freelancers and virtual assistants, receiving payments from abroad. BPI plans to expand access to this service for a wider client base before the upcoming 49th ASEAN Summit in November.
Filipinos move billions of pesos every year, and it is our responsibility to make sure that their money arrives faster, cheaper, and just as securely as it does today.
TG Limcaoco, BPI President and CEO
How It Works
Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar. In this settlement system, stablecoins will serve as an intermediary, facilitating the conversion of funds into Philippine pesos before they reach recipient accounts.
Regulatory Framework and Industry Landscape
BPI is conducting this pilot in collaboration with the Bangko Sentral ng Pilipinas (BSP) and within current regulatory frameworks. The bank emphasizes that any expansion of services will be contingent on regulatory compliance, particularly concerning consumer protection and transparency.
Other platforms, such as Coins.ph and PDAX, already employ stablecoin conversions for local users, indicating a growing trend in the Philippine financial landscape. Additionally, Cebuana Lhuillier is developing its own stablecoin solution for cross-border remittances.
A Shift in Digital Asset Strategy
This pilot marks a significant shift in BPI's strategy regarding digital assets. In July 2021, BPI's CEO expressed skepticism about private cryptocurrencies due to their lack of intrinsic value and legal backing, favoring central bank digital currencies (CBDCs) instead.