Philippines -- Stablecoin Regulations Regulatory Overview

Stablecoins in the Philippines are regulated primarily by the Bangko Sentral ng Pilipinas (BSP) under its virtual asset service provider (VASP) framework, allowing issuance and use by licensed entities with strict oversight, though not classified as fiat currency; they may qualify as securities under the Securities Regulation Code (SRC) if meeting investment contract criteria.[3][5][7]

Classification

• Stablecoins are not considered fiat or sovereign currency but are permitted under BSP-supervised VASP regimes.[3]
• They are not explicitly classified as e-money or payment tokens; regulation is unfolding via BSP pilots and VASP rules rather than e-money laws.[1][2][3]
• Potentially securities under Section 3 of the Securities Regulation Code (SRC) if they involve investment contracts with profit expectations; purely pegged, collateral-backed, or algorithmic stablecoins without profit elements fall outside SRC and default to BSP oversight.[5]
• Oversight splits: BSP handles custody, exchanges, on/off-ramps, and payment roles via Circular 1108; Securities and Exchange Commission (SEC) governs issuance, marketing, and trading under its Crypto-Asset Service Provider (CASP) regime.[7]

Issuer Licensing

• Issuers must register as VASPs with BSP, maintaining PHP 100 million minimum paid-up capital (SEC CASP), adequate reserves, cybersecurity, and a local office.[3][7]
• New VASP licenses are frozen indefinitely as of 2025, prioritizing existing licensees.[7]
• Pilots operate in BSP's Regulatory Sandbox Framework, as with Coins.ph's PHPC approval on May 9, 2024 (exited sandbox June 2025).[1][3][4][6]

Reserve Requirements

• 1:1 backing with cash and cash equivalents in Philippine bank accounts, managed via compliant banks.[1][3][4]
• Issuers must publish proof-of-reserve reports, conduct regular audits, and report operations to BSP.[3]

Redemption Rights

• Full redeemability at 1:1 peg ensured by reserves in domestic accounts, protecting holder rights under BSP consumer protection rules.[1][3]

Algorithmic Stablecoin Rules

• No specific rules mentioned; algorithmic (uncollateralized) stablecoins likely not deemed securities under SRC due to lacking profit expectations or collateral, falling under general VASP/BSP oversight with heightened risk scrutiny.[5]

CBDC Interaction

• No direct rules or interactions specified in available sources; BSP focuses on stablecoin pilots without referencing CBDC overlap.[1][2][3]

Key legislation includes BSP Circular 1108 (VASP/AML/CFT for exchanges/custody), BSP Regulatory Sandbox Framework, SEC CASP regime, and SRC Section 3 (securities definition). Regulations emphasize AML/CFT, KYC, consumer protection, and financial stability, with ongoing enforcement against unlicensed platforms.[3][7] Framework is evolving, with PHPC's sandbox exit marking a milestone.[3]