The Philippines is experimenting with controlled trials of a national stablecoin directly linked to the local peso.
In collaboration with crypto wallet provider Coins. ph, the Bangko Sentral ng Pilipinas (BSP) has given the green light for the pilot of PHPC, a stablecoin backed by the Philippine peso.
This initiative falls under the BSP’s Regulatory Sandbox Framework, signaling a cautious but forward-looking approach to digital currency.
Coins. ph will be tasked with maintaining cash reserves in pesos equivalent to the circulating supply of PHPC within the sandbox environment.
This move aims to facilitate a smooth transition between the digital and physical forms of currency.
The sandbox testing phase is not just a technical trial; it’s a real-world assessment of PHPC’s potential impact on the local fiat ecosystem.
Beyond its role as a medium of exchange, PHPC holds promise for various applications, including domestic and cross-border payments, trading with other virtual assets, hedging against market volatility, and providing collateral and liquidity in DeFi applications.
However, before PHPC can make its debut in the mainstream financial landscape, it must pass rigorous evaluations and secure final approvals from the central bank.
The duration of the testing phase remains flexible, with a window ranging from three to 12 months, depending on the complexity of the project.
This isn’t the Philippines’ first foray into stablecoins. Back in July 2019, UnionBank launched PHX, a stablecoin pegged to the Philippine peso, with a focus on promoting financial inclusion.
Implemented on UnionBank’s i2i platform, PHX aimed to facilitate seamless transactions and extend digital financial services to underserved communities.
