The Bangko Sentral ng Pilipinas (BSP) is set to kick off controlled trials for a new national stablecoin linked 1:1 to the local peso.
Partnership with Coins.ph
Under BSP’s Regulatory Sandbox Framework, the central bank approved a pilot for PHPC, a stablecoin backed by the Philippine peso, in collaboration with crypto wallet provider Coins.ph.
Coins.ph will uphold cash reserves in pesos equal to the circulating supply of the PHPC stablecoin during the sandbox testing phase. This approach aims to facilitate the transition of PHPC back to physical fiat currency, as stated in the announcement.
The sandbox trials are designed to assess the practical performance of PHPC and its effects on the local fiat currency ecosystem.
Potential Applications
PHPC could find utility in domestic and international transactions, virtual asset trading, volatility hedging, and supporting collateral and liquidity in DeFi (Decentralized Finance) platforms.
The outcome of the trials will determine whether PHPC progresses from the sandbox to real-world implementation. However, final deployment hinges on evaluations and approvals from the central bank.
The duration of testing could span three to 12 months from the pilot’s launch, depending on project complexity. Notably, no official deadline was disclosed for the stablecoin experiment.
Stablecoin History in the Philippines
Stablecoins backed by the Philippine peso debuted in July 2019, spearheaded by UnionBank, a local commercial bank.
UnionBank introduced PHX, a payments-oriented stablecoin pegged to the Philippine peso, to promote wider financial inclusion. This move aligns with BSP’s efforts to advance digital financial access across the nation.
Implementation on i2i Platform
PHX is being utilized on UnionBank’s i2i platform, facilitating seamless transactions between individuals, institutions, and across islands. Similar to PHPC, PHX can be easily converted back to pesos, which are then credited to users’ UnionBank accounts.
