The Philippines central bank, Bangko Sentral ng Pilipinas (BSP), is set to initiate controlled trials of a national stablecoin pegged 1:1 to the local peso.
BSP has granted approval for the pilot of PHPC, a Philippine peso-backed stablecoin, in collaboration with crypto wallet provider Coins.ph, operating within BSP’s Regulatory Sandbox Framework.
Under the partnership, Coins.ph will maintain cash reserves in pesos equivalent to the circulating supply of the PHPC stablecoin within the regulatory sandbox. This pegging of the stablecoin to the local currency aims to facilitate its seamless conversion back to physical fiat.
The sandbox trials intend to evaluate the real-world performance of PHPC and its impact on the local fiat ecosystem. Potential applications include domestic and cross-border payments, virtual asset trading, hedging against market volatility, and providing collateral and liquidity in DeFi applications.
The outcome of the sandbox testing will determine the transition of PHPC from the experimental phase to actual usage. However, the formal deployment will require final evaluations and approvals from the central bank.
Local regulations stipulate that the testing period can vary from three to 12 months from the pilot launch date, depending on the project’s complexity. No specific deadline was disclosed during the announcement of the stablecoin experiment.
Stablecoins backed by the Philippine peso were introduced in July 2019 by UnionBank, a local commercial bank. UnionBank launched PHX, a payments-focused stablecoin, to promote financial inclusion and support BSP’s digital financial inclusion initiatives.
PHX is implemented on UnionBank’s i2i platform, facilitating seamless redemption for pesos credited to users’ UnionBank accounts. The i2i platform enables transactions island-to-island, institution-to-institution, and individual-to-individual, fostering greater accessibility to digital financial services.
Get $200 Free Bitcoins every hour! No Deposit No Credit Card required. Sign Up