In the Philippines, small and medium enterprises (SMEs) and online sellers are increasingly facing challenges when dealing with international payments which come with high remittance fees, long settlement times, compliances and constraints and currency volatility. But stablecoins offer an alternative - stablecoins are digital tokens pegged to fiat currencies such as USD. They help in bridging the gap between digital finance and blockchain rails enabling SMEs to accept global payments and reduce operational costs giving them the leverage of financial flexibility. Through this article, we’ll get into exploring how Filipino businesses can adopt stablecoins, their associated benefits, challenges and pragmatic steps to implement and utilize them. 

Why are stablecoins gaining traction in the Philippines 

According to current trends and habits of users and businesses, stablecoins are gaining a major traction in the country;

1. According to the Crypto council of innovation, the Philippines is among the nations with high crypto usage rates with more than a tenth of the population already using crypto in various ways. 

2. The Bangko Sentral ng Pilipinas (BSP) is actively experimenting with regulatory frameworks to legally accommodate stablecoin usage and operation into the national systems. This includes pilot stablecoin projects (eg. PHPC is a Peso-pegged stablecoin by Coins.ph in Philippines) 

3. Stablecoins are being used in remittance and cross border transfers with growing institutional and regional support in the Philippines. 

4. For SMEs and sellers, stablecoins offer a way to receive USD pegged payments instantly without the risk of crypto volatility - enabling smoother cross border flows. 

These initiatives and experiments together position stablecoins towards solving many pain points faced by Filipino SMEs and ecommerce sellers.  

Key benefits that stablecoins offer for Filipino SMEs and online sellers 

Stablecoins offer a plethora of benefits to make operations and financial execution easier for SMEs and ecommerce sellers, let’s get into the details; 

1. Lower transaction and Remittance costs 

Traditional international payouts and remittances often incur multiple layers of fees and obligations like FX spreads, intermediary charges, etc. Stablecoin transfers, on the other hand, typically involve minimal blockchain network fees and fewer intermediaries reducing cost leakage. 

2. Faster settlements 

Stablecoin transactions settle on blockchain networks in minutes or seconds instead of spanning over days like wire transfer or remittances. This added speed improves cash flow and responsiveness for SMEs. 

3. USD pegged stability advantage

Unlike volatile cryptocurrencies like Bitcoin and Ethereum, stablecoins keep a 1:1 peg to a fiat currency, most often USD. This means that sellers can directly receive value in USD-equivalents without worrying about sudden price fluctuations. 

4. Access to global buyers 

SMEs often face challenges while accepting payments from international customers due to credit card limitations, blocked cross border payments or lack of banking access. To combat this, stablecoins open legal channels where any buyer with a crypto wallet can pay easily.

5. Efficient conversion (off ramp to PHP)

Through partnership with local exchanges or compliant off ramp platforms, conversion of stablecoins to local currencies, here Philippine Pesos (PHP) becomes smooth and can be deposited to local bank accounts directly enabling seamless local liquidity management. 

6. Transparency, auditability and verifiability 

Blockchain transactions are inherently traceable and transparent which helps SMEs with records, accounting, auditing and fraud proof management. 

7. Round the clock access and financial inclusion  

In the areas with limited banking infrastructure, stablecoins allow these sellers to receive payments anytime, outside of banking hours or remote locations. 

8. Competitive edge and differentiation  

Offering stablecoin payments, along with adding flexibility and accessibility, adds an edge to the business and helps attract tech savvy consumer base, cross border clients and crypto enthusiasts. 

How to use stablecoins (USDC/USDT) as SMEs and online sellers 

Here’s a step by step guide as to how SMEs and businesses in Philippines can adopt and integrate stablecoins in their processes;

1. Select a stablecoin network 

Choose a trusted stablecoin like USDC or USDT considering the right blockchain network (eg. Ethereum, Tron, Solana, etc) with lower fees and end to end  wallet support.

2. Set up a business crypto wallet 

You can use a secure non custodial wallet system if you’re comfortable with managing keys or also opt for custodial wallets via regulated platforms for  ease of setup.  

3. Partner with payment gateways or merchant platforms 

Use payment gateways (eg. TransFi’s Bizpay or similar platforms) that support stablecoin payments and handle on chain integrations and extended features for payment confirmation, receipts, conversion logic and settlement aids. 

4. Display stablecoin payment options at checkout 

Integrate stablecoin payment buttons and extend the ease of these payments to the customers via smooth user experience. Informing about QR codes, wallet instruction guides on websites, invoices or checkout flows can help with the process.

5. Receive payments and conduct on chain verification

When a buyer pays in stablecoins, the gateway or your system directly records blockchain confirmation. 

6. Off ramp - PHP conversion options

If you want local liquidity, convert the stablecoins into Philippines Pesos via local exchange or integrated off-ramp partners then directly withdraw value to your local bank. 

7. Reconcile and Record

Map each payment transaction to orders/invoices within the system. Ensure that your accounting system is compliant and scalable. 

8. Monitor, Iterate and Scale

Track metrics like failed payments, conversion delays and on chain costs. Once volume grows, scaling financial opportunities becomes efficient. Moving forward one can explore direct integrations along with negotiating for better rates. 

Deployment scenarios and best practices for stablecoins in Philippines 

While deploying stablecoins for financial up-track, consider the mentioned strategies and implement what resonates the most;

1. Hybrid payment strategy - It’s a good idea to offer both fiat and stablecoin options at checkout to reduce friction for non crypto customers.

2. Dynamic alerts and conversions - if the stablecoin value fluctuates slightly during checkout, auto adjust the invoice to match real time USD value to overcome any mismanagement.

3. Transparent fees - It’s a good practice to show any network or gateway fee to buyers upfront to reduce confusion. 

4. Instant reconversions - if you don’t want to hold stablecoins, auto conversion to PHP within seconds via your gateway provides autonomy.

5. Batch and bulk payments - One must combine multiple purchase payments to reduce the on-chain cost.

6. Onboarding and information - It’s important to inform users, through sample guides, FAQs and support to help buyers who are unfamiliar or new to crypto. 

7. Use multi signature or custodial security - for funds above certain thresholds, it’s a good idea to use multi-sig wallets or custodial solutions to reduce associated risk. 

Conclusion 

Stablecoins offer transformative potential for Filipino SMEs and online businesses by simply enabling borderless, fast and cost effective USD equivalent payments. They can provide a great financial makeover for micro businesses, exporters, digital merchants and freelancers alike - stablecoins can help bridge the gap between global clients and local ecosystems. 

By integrating a stablecoin payment solution in your business via a trusted platform, you can unlock the potential of access to global markets, reduce remittance leakages and maintain liquidity in your local currency. Looking for the right place to get started? Talk to experts at TransFi or get started with TransFi BizPay for seamless, secure and scalable stablecoin integration in your operations.

To know more about stablecoin payments, also read: How Indonesian Merchants Can Accept Global Payments Using Stablecoin

Frequently asked questions (FAQs)

1. What are the major use cases of stablecoins for Filipino SMEs and online sellers?

Important use cases include;

• Export and cross border sales
• Freelance, services and digital goods
• Marketplace Disbursements 
• Supplier Procurement 
• Micro merchants and offline sales

2. Are stablecoins legal for business use in the Philippines? 

Yes, while stablecoins are not legal tender in the Philippines, they operate under VASP regulations which help licensed gateways provide compliant paths. 

3. Which stablecoins are best for early adoption for e-commerce and SMEs?

USDC and USDT are most widely used and trusted stablecoins for adoption across global industries. 

4. Can I automatically convert stablecoins into PHP?

Yes, many platforms like TransFi support off-ramp services directly depositing the local currency into the bank accounts. 

5. How expensive are stablecoin transfers?

They are not expensive - the typical blockchain network fee is a small fraction (often less than 1%) compared to traditional modes of payments.