The Bank of the Philippine Islands (BPI) has launched a pilot program using stablecoin settlement rails for cross-border payments, becoming the latest major Philippine lender to explore blockchain-based infrastructure for international remittances.

The Philippines consistently ranks among the world's largest remittance-receiving countries, with personal remittances accounting for nearly 10% of GDP according to World Bank data, making the efficiency of cross-border payment infrastructure economically significant for millions of Filipino households.

The Ayala-led bank is partnering with global digital clearinghouse Meridian to test a stablecoin-based settlement system designed to process inbound international payments and convert them into Philippine pesos for deposit directly into customers' BPI accounts, according to local reports from ABS-CBN and the Philippine Daily Inquirer.

The initiative initially targets payroll payments and overseas earnings received by freelancers, virtual assistants, and workers in the informal economy — segments that often rely on slower, costlier legacy channels when receiving funds from abroad. Traditional cross-border remittances routed through correspondent banking networks can involve multiple intermediary institutions, each adding settlement time and fees. BPI plans to extend the service to a broader customer base ahead of the 49th ASEAN Summit in November, where the bank expects to showcase the project as part of its digital banking strategy.

Settlement Layer, Not Replacement Infrastructure

Rather than replacing existing banking infrastructure, the system employs stablecoins as a settlement layer between sender and recipient. Once a transfer is completed, recipients receive Philippine pesos in their BPI accounts, allowing the bank to combine blockchain-based settlement speed with conventional banking safeguards.

BPI President and Chief Executive Officer Jose Teodoro Limcaoco said the project builds on the bank's ongoing digitalization strategy. He emphasized that the bank wants Filipinos receiving money from abroad to access their funds more quickly and at lower cost without compromising security standards.

Meridian President and Chief Executive Officer Will Haering said the partnership demonstrates how stablecoin technology can be integrated into the banking system while maintaining reliability and customer protections.

The pilot will proceed in coordination with the Bangko Sentral ng Pilipinas (BSP), the country's central bank. Any future expansion will depend on regulatory safeguards, including consumer protection measures and transparency around stablecoin reserves.

Philippine Regulators Tighten Crypto Oversight

The BPI-Meridian pilot arrives as Philippine regulators continue developing rules governing digital assets, tokenization, and stablecoin-related services.

In June, the BSP introduced stricter requirements for licensed virtual asset service providers (VASPs), directing them to strengthen due diligence before listing cryptocurrencies. Under the central bank's guidance, exchanges must assess issuer background, market maturity, transparency, liquidity, legal compliance, and use cases before making digital assets available to customers.

The BSP also devoted specific attention to fiat-backed and asset-backed stablecoins. Its guidance stated that providers may need to examine reserve composition, redemption rights, issuance and burning mechanisms, and the quality of backing assets to ensure users can redeem tokens under normal market conditions. The central bank further required continuous monitoring of listed assets and reiterated that privacy coins remain prohibited for licensed VASPs.

Separately, the Philippine Securities and Exchange Commission has continued using its Strategic Regulatory Sandbox, known as StratBox, to test digital asset products under regulatory supervision. Speaking during Philippine Blockchain Week in June, SEC Commissioner Rogelio Quevedo said the regulator had become comfortable that the country's existing legal framework could accommodate tokenized assets, while noting that sandbox participation does not exempt companies from existing laws.

According to the SEC, four companies have already entered the sandbox, including a tokenized real estate project and firms testing investment products linked to U.S. equities. BlockShoals Technologies also received approval to test crypto-related services within the program.

Earlier in July, the SEC granted BlockShoals final approval to begin StratBox testing with Binance as its global crypto-asset service provider partner. The BSP later clarified that neither BlockShoals nor Binance currently holds a Philippine virtual asset service provider license and said participation in the SEC's sandbox does not replace separate licensing requirements overseen by the central bank.

Expanding Stablecoin Adoption in the Philippines

BPI's initiative adds to the country's growing adoption of stablecoin technology for payments. In 2024, Philippine cryptocurrency exchange Coins.ph expanded its peso-backed PHPC stablecoin to the Ronin blockchain, allowing users to move funds and spend gaming earnings more easily within the country. The Ethereum-based stablecoin is backed one-to-one by the Philippine peso, with Coins.ph maintaining reserves consisting of cash and other traditional financial instruments.

The entry of a major universal bank like BPI into stablecoin-based settlement reflects a broader trend across Southeast Asia and other remittance-heavy markets, where established financial institutions are evaluating whether distributed ledger technology can reduce friction in cross-border corridors that have historically depended on slow and multi-layered correspondent banking arrangements.

For BPI, the pilot targets a different segment by focusing on cross-border settlements handled through the banking system rather than blockchain-native payments. If the trial proceeds as planned, the project could provide overseas workers, freelancers, virtual assistants, and other recipients of foreign income with a faster settlement process while keeping transactions within the country's regulated banking framework.

Any broader deployment, however, will remain subject to coordination with the BSP and compliance with regulatory requirements covering consumer protection, reserve transparency, and other safeguards outlined for stablecoin-based financial services.